Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

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Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Macroeconomics

<p>Aggregate demand is exceeding supply in the US economy, partly due to employment growth lagging behind the recovery in real output. Based on current trends, private sector payrolls will not return to their prior peaks for another 12-months, while there are debates as to whether recent gains are sustainable into 2022. </p>
<p>Labour supply constraints on output could persist over the summer, but the Federal Open Market Committee (FOMC) is probably discounting an easing of headwinds in September when schools re-open and enhanced unemployment insurance payments expire. Meanwhile, the long-term unemployed form a very large component of the total and the FOMC could face a pressure to resist tapering actions if this backdrop fails to improve quickly. </p>
<p>Despite the slow recovery of the labour market, consumer spending remain well-underpinned and far less dependent on equity withdrawal compared to the last period of strong house price appreciation. Companies will be keen to bridge the gap between supply and demand by making up for last year's lost capital spending plans, but there are concerns about excess new capacity being brought on stream when the economy is destined to slow.</p>
<div>Long-term US Treasury yields have been declining since March due to investors demanding lower real returns, thereby implying concerns about the economic outlook if the FOMC decides to taper asset purchases. In the aftermath of the taper tantrum, bond investors eventually forced the FOMC to lower their estimate of the neutral policy rate. Valuations for perfectly-priced US equities are vulnerable if the economic slowdown anticipated by US Treasury investors is sufficiently large to negatively impact corporate profit expectations.</div>

Aggregate demand is exceeding supply in the US economy, partly due to employment growth lagging behind the recovery in real output. Based on current trends, private sector payrolls will not return to their prior peaks for another 12-months, while there are debates as to whether recent gains are sustainable into 2022. 
Labour supply constraints on output could persist over the summer, but the Federal Open Market Committee (FOMC) is probably discounting an easing of headwinds in September when schools re-open and enhanced unemployment insurance payments expire. Meanwhile, the long-term unemployed form a very large component of the total and the FOMC could face a pressure to resist tapering actions if this backdrop fails to improve quickly. 
Despite the slow recovery of the labour market, consumer spending remain well-underpinned and far less dependent on equity withdrawal compared to the last period of strong house price appreciation. Companies will be keen to bridge the gap between supply and demand by making up for last year's lost capital spending plans, but there are concerns about excess new capacity being brought on stream when the economy is destined to slow.
Long-term US Treasury yields have been declining since March due to investors demanding lower real returns, thereby implying concerns about the economic outlook if the FOMC decides to taper asset purchases. In the aftermath of the taper tantrum, bond investors eventually forced the FOMC to lower their estimate of the neutral policy rate. Valuations for perfectly-priced US equities are vulnerable if the economic slowdown anticipated by US Treasury investors is sufficiently large to negatively impact corporate profit expectations.

US Growth Held Back by Supply Constraints, but US Treasury Investors Predict Slower Times Ahead