Willy Walker, Chairman and CEO of Walker & Dunlop, recently welcomed Kate Moore, Managing Director of BlackRock’s Global Allocation investment team to the September 6th 2023 edition of the Walker Webcast. During their discussion they explored a range of topics including artificial intelligence, equity and bond markets investments in clean energy and cyber-security as well as the Federal Reserve’s continued Effective Federal Fund Rate increases.
The conversation then shifted to consumer spending with Moore noting that it is “a mixed bag”. She highlighted Dollar General cutting profits forecasts while Lululemon increased its full year outlook and Best Buy promoting a “constructive outlook” for 2024. Additionally she pointed out two main pressures on consumers: tax refunds being cut off from small businesses which will lead to retrenching in spending; plus student loan payments resuming at higher than projected numbers which could have an impact on those expected to pay after moratoriums end. Lastly increasing oil prices were noted as disproportionately hurting lower-end consumers due to their reliance on fuel costs for transportation etc..
Moore went onto explain that despite these issues there has been improved growth expectations over this year with recession fears seeming less likely now than before – forecasting 3.4% core CPI by year end subject however too revision if needed . The US economy was also seen adjusting well overall so far despite rising interest rates/oil prices etc..
Moving onto chip manufacturing/onshoring both parties discussed how anticipated demand combined with CHIPS Act 2022 means more fabrication plants need building plus money invested into companies dealing with chip production/distribution alongside expanding US expertise in this field – though not without challenges such as having continuous stream workers available or setting up financial legal export trade systems required for successful operations .
Finally when asked about what wasn’t focused upon yet may be concerning Moore highlighted disconnect between small vs large business optimism where tightening financial conditions have had an effect upon future growth expectations leading smaller firms worrying about obtaining financing when needed since they are essential employers within USA thus something worth monitoring going forward .
