KEYNOTE: ECONOMIC OUTLOOK
Tony Roth is chief invest- ment officer for Wilmington Trust Investment Advisors, Inc., the investment advisory arm of Wilmington Trust and
M&T Bank. Roth plays a key role in developing and delivering investment services to wealth, institu- tional, and brokerage clients. He provides strategic direction for the firm’s asset management invest- ment activities including asset allocation, manager research, and portfolio construction. Roth leads the firm’s Investment Committee. Roth explained the primary factors underlying the sustained outperformance of the U.S. economy relative to the rest of the developed world. He emphasized labor market flexibility, capacity for innovation driven by technological advancements, and high fiscal responsiveness in times of economic turmoil. Despite these strengths, Roth highlighted the risks of an excessive debt-to-GDP level, noting that current fiscal deficits are unprecedented in expansionary periods. He said he expected a normalization of inflation and interest rates over the coming year. Roth also discussed the potential impact of AI and technology on productivity and the labor market.
KEY TAKEAWAYS
• The U.S. economy continues to outperform Europe and Japan due to its robust labor market flexibility, technological innovation, and effective fiscal responsiveness during crises. • U.S. fiscal policy is unsustainable, particularly if inflation and interest rates remain higher than expected in the coming years. A combination of entitlement reforms
and tax increases could address the problem, but political will is lacking.
• As has been true of other digital technologies, adoption of AI will be a major driver of U.S. growth, but the hollowing out of middle-income jobs is a concern.
“We have a pretty positive short-term perspective and a much more concerned medium- to long-term perspective … particularly relative to the fiscal deficits that we’re running in this country, which are utterly unsustainable …”
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