We tee up the likely tone of the Federal Reserve's virtual Jackson Hole conference next week, by reviewing our forecasts for the key cyclical, macro-economic indicators of the U.S. economy. Then, we review our long-held forecasts over the structural imbalances of the economy, arguing that the persistence of those imbalances require even more forceful policy stimulus from fiscal and monetary authorities. If the political pendulum swings on November 3rd to the Democratic Party, in the Presidency and the Senate, then we anticipate another +2.650 trillion fiscal stimulus by February 2021. U.S. stock markets might advance to never before seen levels next year upon the resilience of the economy, the massive stimulus, and a vaccine(s) at some point over the coming 18 months.
In this episode, MUFG Rates Strategist, John Herrmann, reviews forecasts over the coming 12 months and beyond and tells listeners what these structural imbalances might ultimately require. He also offers more insights on the upcoming U.S. election and gives listeners an update on his core strategic investment stance of a 2s-30s yield curve steepener.