U.S. Economic Outlook. First quarter 2021

Summary

Economic recovery stalling after holiday surge in Covid-19 cases. Vaccine rollout falling short of expectations. High frequency indicators confirm need of further stimulus. Risks of widening inequality from long-term pandemic scarring.

Key points

• Key points:
• Additional fiscal stimulus would present upside to the economic outlook.
• Unified government improves chances for Biden’s agenda.
• Inflation outlook tilting to upside.
• Interest rates to remain at ELB despite optimism.
• Structural trends point to continuation of lower-for-longer for long-term yields.

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