Global economic recovery is ongoing, but momentum is starting to fade
The global economic recovery has continued as a result of looser social distancing restrictions. Yet, its momentum is starting to fade as increasing infection numbers prevent a return back to full normality. We estimate current GDP shortfalls of G7 countries to be between 3 - 9%. Manufacturing and Services PMIs in the US and EA confirm the ongoing recovery though the EA shows somewhat weaker momentum. After a growth bounce-back in Q3, we expect the recovery to lose steam in Q4.
The ongoing economic recovery remains fragile and is starting to lose steam.
Additional monetary and fiscal measures are needed to avoid a double-dip recession.
The Fed's monetary policy framework review cements the "Fed put" and low interest rates for longer.
Our forecasts remain largely unchanged.
Balance of risk remains to the downside. US fiscal stimulus uncertainty and US-China trade tensions are key to watch.