U.S. Macroeconomic Pulse. July 2020

Baseline assumes real GDP declines by 5.1% in 2020. Peak unemployment reached, but risks to the labor market remain. Disinflationary headwinds abate, but inflation to remain low in 2020.

Key points

• Key points:
• Fed to keep rates at the Zero Lower Bound, balance sheet growth to continue
• Long-term yields to remain low
• Uncertainty remains over the depth and duration of the crisis
• Risks tilted to the downside, although the worst of the crisis likely behind us

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