With goods consumption now back above pre-pandemic levels, restrictions on many activities still hampering the recovery in the services sector and fiscal support fading, the pace of recovery will continue to slow. The rebound in production is lagging which will push goods prices up over the coming months, but overall inflation is likely to continue running below the Fed’s new 2% average inflation target. That should eventually prompt more monetary stimulus but, with Treasury yields already so low, policymakers are reaching the limits of what they can do. There is still a chance more fiscal support is agreed before the November elections, but prospects for more stimulus further ahead would probably require either party to win both the Presidency and full control of Congress.
20 November, 2020
in US Economics › US Economics Update
13(3) decision could be net positive for the economy
