- Two essential 'picks and shovels' businesses
- Infrastructure America needs whoever is president
After years of outsourcing to China, the United States has decided it needs to invest in its own manufacturing capabilities. The headline stories have focused on the investment in semiconductor plants, but the government has also promised trillions in spending on roads, railways and bridges. This huge fiscal stimulus might contribute to persistently higher inflation, but it is good news for the companies that will be tasked with building the US’s bridges, roads, and manufacturing facilities.
In his annual shareholder letter, JP Morgan chief executive Jamie Dimon said he believes the US might have “stickier inflation and higher rates than the market expects”. He sees a “growing need for increased spending” to transition the US economy to green energy, as well as restructure its supply chains and boost military expenditure. However, he admits this will all put further upwards pressure on consumer prices, with a forecast that interest rates could hit 8 per cent.
