U.S. Economic Outlook. Fourth quarter 2020

Pandemic and election could add noise to short-term outlook, but medium-term prospects improving. Baseline assumes GDP growth of -4.6% in 2020 and 3.8% in 2021. Pace of decline in unemployment to slow as persistent headwinds increase.

Key points

• Key points:
• Deflation risks giving way to potential for upside in the medium-term.
• Fed to keep rates at ELB through 2024 and prepare to fine-tune balance sheet strategy.
• Long-term yields lower for longer to prevail.
• Residential real estate supported by tight market conditions.
• Structural and post-pandemic trends underpin commercial real estate fundamentals.

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