Sputtering – Stephen Roach

Stubborn to the end, I remain in the “old school” that insists savings, deficits, and debt matter. So far, the US has yet to flinch as pressures mount on all of these fronts. But as Fed tightening enters a new phase and real interest rates finally tip to the upside, those days may be numbered. Nor can the headwinds imparted by high energy prices be taken lightly; that’s certainly the message from the recent slippage in consumer confidence, the uptick in jobless claims, and a disappointing March employment survey. The resilience of America’s asset-driven economy may be about to meet its sternest test.
Morgan Stanley