You're watching...
Moody’s Chief Economist John Lonski on the impact of government spending on the economic outlook.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
My next guest says the markets.
Disapprove of employment programs funded by higher federal spending joining us now this outlook is John -- chief economist -- Moody's capital markets' John good to have you with us that.
You know -- we're looking at a market that's it's still hot this.
But were you were your ten days ago use it with the Dow Jones industrials at 141000 were offered few points from that.
What's wrong.
They were up six and a half percent for the year to -- that's pretty good I think right now the markets taking your reader has -- State of the Union Address coming up but we're even more.
Ten days ago Murphy reports -- right yes so I think it's just no biting time for the time being what it's also realizing is reports that.
You know this rally is not being driven by expectations.
Have they asked their earnings growth for the most part I think it's basically the consequence.
Of with the expectation that bond yields stay low.
And in order to old boy the dangers of low bond yields as -- -- low returns.
You have more money moving into equities while -- -- -- by the rotation ninetieth.
Well I could say that I I by the rotation idea this idea we -- now on money market -- leave the bond market go to you know but I think a lot of them more money is coming out of the special dividends that we had right.
At the end of 2012 as well as there's a lot of money -- -- out of those.
Of money market mutual funds -- -- close to 0% interest.
President talking about job -- -- to jobs once again.
And he wants more spending picks are just about done with that the debt problem -- the country -- -- sixteen and -- trillion dollars right now.
We don't unfortunately all of this uncertainty regarding how we eventually resolved.
The US is unsustainable.
That -- budget.
Situation.
Is weighed on business activity and why -- both.
-- quite isn't.
Why -- Wall Street firms why is in business saying straight up flat out what they were very well -- it which the rest of the country needs to hear because.
The parties are making this look like a partisan battle is is there want.
Just say flat out this is a crazy idea Mr.
President it's dumb.
-- keep spending money and throwing it away and creating greater debt for generations of Americans it's time to act like a grown up mister president.
Why don't they say things like that.
I really don't have the answer -- that other than affected they think there's a cost to being honest about the quality of the -- federal budget.
Cost to to that.
If this president has an opportunity to say something new.
This sounds like that are just noticeably repetitive.
Approached economics and fiscal while I mean one positive that I -- that I got you what went positive shock would be this you know that it it it doesn't cost much.
He ease regulations as far as the budget is concerned.
If they did so on the energy front that could generate a lot more jobs help with some downward pressure and energy cost which in turn spurs consumer spending manufacturing activity in exports.
I certainly hope those sorts of White -- for listening to mr.
Johnson thanks for better thank you now.
