Contrarian economist David Rosenberg, chief economist and strategist at Toronto-based Gluskin Sheff & Associates, offers market insights in a recent interview with Barron’s. Here are some highlights:

• View on U.S. economy: “We’re going to average close to 2% real GDP growth this year, well below consensus.” Rosenberg doesn’t think the economy will “break out to the upside,” saying that there will be offsets to proposed tax relief, deregulation and capital repatriation including potential trade tariffs and protectionism.
• Aging baby boomers: “It doesn’t get a lot of press” says Rosenberg, “but it is extremely important.” He says there will be 1.5 million boomers turning 70 in each of the next 15 years and that there is a “savings crisis” in this segment of the population.
• Stock market outlook: “One of the most bullish arguments I hear about the stock market is that the earnings recession is over and I roll my eyes,” he says, citing how the S&P 500 rallied by over 6% during a six-quarter earnings recession (in which profits plunged by 22%).
• The Trump Rally: Rosenberg points out that those sectors that have outperformed are the same that would benefit from Trump’s promises for deregulation, tax reform and repatriation. “Based on where we are right now,” he argues, “there is more room for disappointment than for any upside surprises.” He believes there will be a correction this year and says, “I would either buy some protection or raise some cash.” Europe and Japan, he says, look “interesting.”
• Interest rates: “The Fed has already told us that three [rate hikes] is a virtual guarantee unless something goes awry. If anything happens that causes the Fed to raise its GDP profile for the second half of the year, it will raise rates even more.”