DAVOS, Switzerland — Regulation, the unemployment rate, and global competition are among the major concerns that could impede the performance of the U.S. economy this year.
That’s according to some of the assembled financial minds at the World Economic Forum in Davos, Switzerland, last week.
“The biggest concern is regulatory antagonism by the government that would affect the most successful economic growth in recent years,” said Kenneth Hersh, Chief Executive of oil-focused private equity firm NGP Energy Capital Management. “Things like targeted tax increases would choke the economic engine of our country.”
Bill Browder, Chief Executive of the hedge fund Hermitage Capital Management, expressed concern about Federal Reserve’s quantitative easing policy. “Every asset price is being artificially inflated by policy makers. With interest rates around zero, the moment that stops, valuations will rise. The Federal Reserve has no idea what they’re going to do. When this artificial thing gets taken away, everything will drop.”
For others, such as Joe Echevarria, Chief Executive of accounting powerhouse Deloitte, the most pressing concern was having our growth outpaced by other nations, in turn, hindering our ability to compete on the world economic stage.
“Most pressing is foreign policy,” Echevarria said. “It always has the ability to take things off track. We make it harder on ourselves because the rest of the world is trying to be larger. The U.S. is the most productive economy, but this hinders our ability to compete. We should recognize that we need to compete globally.”
Ibrahim Abdulaziz Al-Assaf, Saudi Arabia’s minister of finance, said: “The challenge is the growth and raising the employment by reshaping and retraining people. The unemployment is decreasing, but it’s because people are leaving the workforce and the view from outside the U.S. is that people need to be trained in new kinds of
From a markets perspective, the U.S. government needs to get a handle on issues of national security, particularly data breaches, said Scott Cutler, head of global listings at the New York Stock Exchange. Cutler specifically cited “the Snowden event,” to use his words, and its subsequent impact on U.S. companies to conduct business in overseas markets.
“For any multi-nationals doing business abroad, the idea of data safety and security is a huge issue, and that issue is coming up in purchasing decisions and investments,” he said.