Hofer also expects the new administration to “clean up the books” and the deficit to widen, causing the US debt-to-GDP ratio to rise significantly. While this could lead to a correction, Hofer remains positive on the US market as investors continue to show their tolerance for its debt load. “We think that the market will digest this,” he says.
LGT Private Banking advises investors to buckle up for a bumpy ride this year. While US President Donald Trump is the biggest wildcard, Stefan Hofer, chief investment strategist at LGT Private Banking Asia Pacific, expects the overall US economy to do well this year.
Having defied all predictions of slipping into recession in 2023 and 2024, the US economy looks set to repeat this outcome this year. The new administration is also set to lower corporate and household income taxes and engage in broad deregulation. “These policies will likely cause a widening growth differential with the rest of the world, causing US assets to outperform and the US dollar to remain strong,” says Hofer in an interview with The Edge Singapore.
