The slow train to US recovery

US

John Birdwood, head of discretionary absolute return portfolios at SGPB Hambros, outlines why US profit margins can continue to move ahead even in an environment of muted growth.

Every economic recovery in the United States is slightly different to its predecessors. The recovery that began in 2009 is no exception to the rule and, as always, the differences have important implications for investors. The most striking feature of this recovery is how much slower it is than its predecessors. It has been accompanied by an emergency setting of the Federal Funds rate and experimental quantitative policies, which have attracted a good deal of comment. Less noticed has been the fact that, in the previous six cycles, the Federal Reserve started raising interest rates...