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Why Confidence Remains Low (Hint: Blame Washington)
February 18, 2014 at 19:00 PM EST
Despite some signs that economic fundamentals are improving – including an improving labor market and rising home prices – U.S. businesses and consumers continue to exercise caution, holding back on spending and new investment. What’s behind this puzzling dilemma? As I write in my new Market Perspectives paper, “The Price of Politics,” I believe that uncertainty over public policy is partly to blame. Investors today are contending with an unusually unknown environment. Political division in the United States is the highest it has been in the post-World War II period. In Europe, reconciling a fragmented banking system and implementing structural reforms is still a work in progress. Elsewhere, many emerging markets are struggling with politically contentious reforms and have key elections this year. The level of political uncertainty is difficult to measure, but there is one measure that can help quantify it: The Economic Policy Uncertainty Index (EPUI) constructed by a team of economists from [...] Click here to read the original article on ETFdb.com. Related Posts: No Related Posts
Despite some signs that economic fundamentals are improving – including an improving labor market and rising home prices – U.S. businesses and consumers continue to exercise caution, holding back on spending and new investment. What’s behind this puzzling dilemma? As I write in my new Market Perspectives paper, “The Price of Politics,” I believe that uncertainty over public policy is partly to blame. Investors today are contending with an unusually unknown environment. Political division in the United States is the highest it has been in the post-World War II period. In Europe, reconciling a fragmented banking system and implementing structural reforms is still a work in progress. Elsewhere, many emerging markets are struggling with politically contentious reforms and have key elections this year. The level of political uncertainty is difficult to measure, but there is one measure that can help quantify it: The Economic Policy Uncertainty Index (EPUI) constructed by a team of economists from [...]
