Article Image

IPFS News Link • Economy - Economics USA

The 'Moment Of Truth' Is Coming For The US Economy, And The First Big Test Is This Week

• Business Insider

The thinking is this: Markets have surged all year like there's not a care in the world. On the other hand, the economy has already been buffeted by one major headwind (the end of the payroll tax holiday) and it could be hit by another (the upcoming sequestration spending cuts. As such, we're about to know whether the economy can really justify the market rally, or whether risky assets will have to come floating back down to earth.

BofA/ML strategist David Woo described this to us as a "moment of truth" for the economy, and anticipated the fight over the sequester (which takes place over the coming weeks) will be where it all happens.