US Treasuries and the Trump administration
Never reason from a yield change
US advanced Q4 GDP growth was released at the end of January to little fanfare but showed a healthy 2.3% annualised growth rate (0.6% at a quarterly rate) and 2.8% when comparing the 2024 annual level to 2023. That is only a slight moderation on the 2.9% growth seen in 2023 on the same basis. The recession that was deemed a certainty for 2023 decided to give 2024 a miss as well. Just as well we have all given up making recession calls for the US.
The US has outperformed in terms of real GDP and real GDP per capita growth relative to pre-pandemic levels, even if that outperformance came somewhat late in the Presidential cycle. Nominal GDP growth was 4.5% at an annualised rate in Q4 and a 1.7 percentage point premium to the return on capital, based on Mike Sandifer's NGDP gap measure.
