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The Fed Speaks This Week; Who is Beto O’Rourke?

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Insights and Market Perspectives

The Fed Speaks This Week; Who is Beto O’Rourke?

Author: Greg Valliere

March 18, 2019

WITH THE ATLANTA FED projecting GDP growth of only 0.4% this quarter, it’s now clear that the government shutdown and frigid weather contributed to an economic stall-out this winter. Fed officials, meeting Tuesday and Wednesday in Washington, surely will maintain their dovish stance, perhaps even considering a worst-case scenario: what if the economy does not bounce back, as expected, in the second quarter?

COULD A RATE CUT BE ON THE TABLE? Not yet, in our opinion, because there’s plenty of fiscal and monetary stimulus in the system — enough to lift growth back into the 2-1/2% neighborhood in the second quarter. But with inflation still tame and signs of an economic uptick probably weeks away, Chairman Jerome Powell faces a challenge in his press conference on Wednesday.

POWELL WILL OFFER ASSURANCES that a recession is not imminent, with better growth coming soon; that will probably be the headline on Wednesday afternoon. But he and the FOMC statement will have to acknowledge the current soft patch — sending a signal that a rate hike is months away, maybe late this year at the earliest. But a rate cut, unthinkable last fall, can no longer be ruled out if the economy doesn’t snap back from this miserable winter.

WHO IS BETO O’ROURKE? His positions are evolving. He’s a moderate on some issues and a progressive on others. He’s not an ideologue. He backtracked last week on a single payer health insurance plan. He’s a free-trader. He has strong support from young people and should raise millions in fundraising. He’s a charismatic enigma, and the press loves him.

THAT ADULATION IS GENERATING A BLOWBACK ALREADY: Acidic New York Times columnist Maureen Dowd roughed him up this weekend, focusing on his ego and O’Rourke’s belief that he has a calling to be president. “The world is bathed in the mystical glow of a messiah,” she wrote, adding that he “floats above the fray, staying vague on nettlesome issues.”

OUR TAKE IS THAT O’ROURKE is haphazard on issues and details — and maybe a little too cool for his own good; he’s a 46-year- old rich guy, and he’s a relative rookie (rookies make rookie mistakes). He’s about to receive a smackdown from the left, and he needs to tighten up his rambling answers that often don’t reveal where he stands. To his credit, O’Rourke proclaimed that he’s a capitalist, a smart move if he’s the nominee.

WE HAVE O’ROURKE IN THIRD PLACE, behind frontrunner Joe Biden and Sen. Kamala Harris, and we concede that he’s difficult to handicap. O’Rourke obviously is intriguing, with his hair and teeth and good looks, and he could catch a wave, as Barack Obama did. Biden has a fight on his hands, but Biden has enormous experience and support from blue collar workers; O’Rourke does not. The great unknown: is Biden’s extensive track record a blessing or a curse?

BIDEN STILL APPEARS TO HAVE THE BEST CHANCE of beating Donald Trump, who spent much of the weekend reiterating his obsessive hatred of the iconic war hero, John McCain. Trump has suffered through a horrible winter; the economy is soft, there was no deal with North Korea and now Trump’s planned trade victory with China has been pushed back well into the spring. Trump will come up with abusive nicknames for O’Rourke and the other candidates, but nicknames may not be enough.


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

©2023 AGF Management Limited. All rights reserved.

Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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