This is Carl Tannenbaum, chief economist for Northern Trust. And here, in quickfire fashion, are answers to the questions that clients have been asking most frequently of late.
First, will recent negotiations between the US and China lead to trade peace between the two countries?
Well, we've had some encouraging signs recently. Negotiations have taken place recently that have actually lasted longer than intended. And more are scheduled. Nonetheless, there are some difficult issues yet to resolve. And it may take a little bit more time. But the two sides may be motivated negotiators, because the economic damage of the trade war is becoming more and more apparent.
Secondly, what do you expect from the new Congress?
Well, unfortunately, I don't expect much, other than a lot of rancor. We've already seen examples of that during the early part of the year. And with budget negotiations ahead of us and also the ratification of the new trade agreement with Mexico and Canada, there may be more opportunities for the two sides to make political points, but not to make much progress.
Third, will Brexit occur on schedule at the end of March?
I doubt that it will, actually. One of the easy ways through these very, very difficult issues is simply to extend the deadline. And Europe has a habit of postponing things that they really don't want to address. Nonetheless, the discussions to take place before then could have a very big impact on the markets and the economies over in Europe.
Finally, how many moves do you think the Fed will make this year, and why?
We've adjusted our forecast there, given some of the economic uncertainty that's around and some of the signs that the economy may be moderating a little bit. We only think that the Federal Reserve will make one more move during the course of 2019, and probably at midyear. And certainly, they'll be very, very sensitive to any signs that the economy is faltering.
And that's the view from here.