Expert opinion

After so many years of loose monetary policy we might face the unintended consequences of huge misallocations of capital.

One key indicator of how a consumer-based economy is performing is car sales.

Flows into European stocks gathered momentum since the end of April, in a resurging trend that accelerated sharply in the first week of May, reflecting a new positive sentiment towards the European markets after that investors had run off in 2016 and now, in just one week, poured 2,5 billions into European equity funds. Many reasons explain this new positive sentiment, from the evaporation of political risk after the French vote, to an improved economic confidence after that the ECB president Mario Draghi expressed optimism about the region’s economic recovery, still keeping the actual monetary stimulus.

For those that invest with the aim of generating an income, the last year provided a unique set of challenges.

Some economists expect the Fed to resume its plan of increasing key interest rates at a gradual pace if the US economy outperforms itself this year. Do you share this point of view?

I do not think the economy really needs to outperform to make the Federal Reserve raise rates. If the economy evolves as expected, the Fed will be hiking interest rates. The Federal Open Market Committee feels that the economy is performing well and that monetary policy needs to be in a normal position. Currently, monetary policy in the US is accommodative, but with the economy close to normal, the FOMC believes that policy should be close to normal too.

President Donald Trump has had experience with bankruptcy. This will prove to be useful as his tax plan, if approved by Congress, will push the US ever closer to financial disaster.

Mattias Martinsson is Chief Investment Officer and partner of Tundra Fonder AB explains what is particular about Frontier Markets

Economists wax eloquent over the platitude that debt stifles growth. It is therefore not surprising that growth in the US has slowed since 2008 and Europe struggles to match pre-crisis results.