Fox-Trot Economy

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DEFINITION of 'Fox-Trot Economy'

A pattern of economic growth where periods of rapid expansion are followed by periods of slow growth. The term "fox-trot economy" is attributed to investment strategist Jeffery Saut, who coined and popularized it to describe a period in which "fast-fast" economic and earnings growth is followed by a "slow-slow" phase.

BREAKING DOWN 'Fox-Trot Economy'

The term is based on the popular fox-trot ballroom dance, in which two fast steps are followed by two slow ones.

A fox-trot economy is somewhat challenging for investors and policy makers, since it follows a pattern that is dissimilar to the usual business cycle. As a result, interest rates and corporate earnings may exhibit higher volatility than is typical over a normal business cycle.

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