U.S. Macroeconomic Pulse. January 2020

Baseline assumes growth of 1.8% in 2020, potential upside emerging. Model-based recession projections suggest probability around 30% over the next 24-months. Moderate job growth and steady unemployment for foreseeable future. Inflation close to 2%, downside risks fading.

Key points

• Key points:
• Fed likely to pause indefinitely as committee evaluates the impact of increased accommodation and monitors risks
• Yield curve steepening with improvement in term premium due to Fed fine-tuning and rising inflation expectations
• Oil price outlook underpinned by weak demand growth in a well-supplied market

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