- The US financial system could also be about to relive the “roaring ’20s,” in accordance with Ed Yardeni.
- “We’re in the early stages of a productivity growth boom,” the veteran strategist informed Bloomberg.
- His feedback include the financial system increasing at a stronger-than-expected tempo and the S&P 500 buying and selling at an all-time excessive.
Veteran market strategist Ed Yardeni thinks the US financial system may be about to relive the “roaring ’20s”.
The Yardeni Research president mentioned throughout an episode of Bloomberg’s “Merryn Talks Money” podcast launched Friday that he is anticipating a mixture of free post-pandemic financial coverage and speedy technological change to drive development greater over the subsequent decade.
“It must have been pretty depressing to think about the outlook for the 1920s at the beginning of the decade,” he mentioned, referring to the current finish of the First World War, the Spanish flu pandemic, and the recession that hit the financial system in 1923.
“And yet it turned out to be the roaring 1920s because of technological innovations, things as high-tech as plumbing, auto-manufacturing adapted more efficient ways of producing things, and as a result of that we had a tremendous productivity boom.”
Fast-forward to in the present day and there are comparisons to be drawn, in accordance with Yardeni.
“There are similarities. We’ve had a pandemic. I think we’ve got a technology revolution that started in the 1990s… every company is a technology company. You either make it or you use it. If you don’t use it, you’re going to lose it, you’re going to go out of business,” he informed Bloomberg.
“Put that all together and I think we’re in the early stages of a productivity growth boom, and I think the data is already there to show that it’s happening,” he added.
Yardeni’s cheery outlook comes only a day after information from the Bureau of Economic Analysis confirmed that the US’s Gross Domestic Product (GDP) expanded by a better-than-expected 3.3% over the ultimate quarter of 2023. The benchmark S&P 500 stock-market index can also be buying and selling at all-time highs.
His views echo these of the Swiss financial institution UBS, which mentioned in November that better-than-expected development numbers from final 12 months would set the stage for a “new macro regime” that would convey a couple of “roaring ’20s outcome” for the US financial system.