Investors have little confidence that the U.S. and Europe will be able to significantly cut debt any time soon.
Citing a poll published by Principal Global Investors and UK think tank CREATE-Research, Reuters reports that “90 percent” of investors believe Europe will not make any progress against its debt by 2016. Similarly, more than 66% have little hope President Obama can rein in U.S. debt in the next three years.
The poll shows that investors believe Europe will continue to try to cut debt via austerity measures. This will mean cuts in social services coupled with increased taxes on the wealthy.
Conversely, investors expect to see the U.S. depend on economic growth to reduce its debt.
The poll surveyed “more than 700 asset managers, pension plans, fund distributors and fund administrators across 29 countries, which together manage $27.4 trillion in assets.”
Follow AWR Hawkins on Twitter @AWRHawkins.