RBC’s Economic Policy Uncertainty Index Is Signaling Bad News For The Markets And The Economy
June 21, 2012
RBC’s Myles Zyblock just published his latest update to the firm’s proprietary economic policy uncertainty index.
The index is not quite as high as it was at the height of last year’s debt ceiling fight, but it is on its way up. And it could be headed much higher.
“Once again, we will be entering a period of heightened political uncertainty by late summer,” writes Zyblock. “A partisan fight over the federal debt ceiling seems likely. This will be compounded by presidential and congressional elections, the fiscal cliff and prospects for some monumental battles over taxation.”
And all of this is bad news for both the economy and the financial markets.
“Regardless of European or Fed action, uncertainty created by D.C. might negatively impact consumer spending, hiring, and investment decisions thereby capping a budding rally in share prices before summer‟s end.”