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Policy stimulus to drive strong recovery

The combined strength of fiscal and monetary stimulus and the early success of the vaccination program means that we expect GDP growth to be 6.5% this year and 4.0% in 2022. We would be surprised if economic growth turns out to be markedly stronger than that, however, since even a 6.5% gain would leave the economy hindered by supply constraints. The bigger risk is a sustained pick-up in inflation, particularly given the Fed’s shift in focus.

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