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Since the last edition of Vantage Point, Covid-19 has wreaked both human and economic devastation on the world. In this edition, we look back at what we’ve been through, look ahead to what might happen, assess the monetary and fiscal policy response, analyze the impact on markets and finally draw some broad investment conclusions in what is a highly uncertain and rapidly-evolving situation.
Start your week off right with our market snapshot from the Global Economics and Investment Analysis Group.
Short term interest rates reached all-time lows in the US in May, rebounding only marginally since then. At face value, markets appear to be pricing in a significant probability of negative rates in the US. We see this scenario as unlikely.
As currently priced, the market is expecting a sharp recovery in growth in 2021. However, our message is to remain cautious. Ultimately the impact on the economy and markets will be primarily determined by the course of the disease...