US economic outlook: roll-off of fiscal support and debt drag suggest a medium-term slowdown

Pent-up savings and dispersal of stimulus should drive GDP growth this year and next. We anticipate lower medium-term growth as the stimulus ends, taxes rise to fund a multi-trillion-dollar infrastructure package, and higher debt loads create a drag.

The key takeaways are as follows:

  • We keep our 2021 forecasts for GDP growth at 6.5%, inflation at 2.5%, and 10-year sovereign yields at 1.8%.
  • Rising corporate and public debt loads suggest a future growth drag, but we see associated systemic risk as low.
  • While downside risks of federal taxes hikes have risen, risks remain balanced.

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Economic Outlook US economic outlook: roll-off of fiscal support and debt drag suggest a medium-term slowdown

SEE ALSO FORMER ECONOMIC OUTLOOKS