Equity Correction Coming, but Not Imminently, Says Manulife's Greene

The video discusses the disparity between earnings growth and economic growth, suggesting that equity markets may face a correction. It highlights the short-term benefits of economic stimulus, while noting potential future challenges such as a fiscal cliff in 2020. The discussion also covers the Federal Reserve's rate hike outlook, pointing out market misconceptions about inflation and growth. The Fed's future forecasts may suggest slight increases in inflation and adjustments in unemployment rates, but these changes are not expected to significantly impact the overall economy.

What is the main driver of equity values according to the discussion?

• Earnings growth

• Government policies

• Interest rates

• Consumer spending

What is the expected economic event in 2020 if lawmakers do not extend spending initiatives?

• An increase in unemployment

• A mini fiscal cliff

• A decrease in corporate taxes

• A significant economic boom

What is the market's expectation for the number of Fed rate hikes next year?

• About 2.5

• About 3.5

• About 4.0

• About 1.6

What inconsistency is highlighted in the market's expectations?

• Unemployment is expected to rise

• Growth is expected to stagnate

• Inflation is expected to decrease

• The Fed is expected to hike rates at the same pace

What might the Fed's new forecasts suggest about inflation?

• It will remain stable

• It will decrease significantly

• It will accelerate more than previously thought

• It will have no impact on the economy