Dallas Federal Reserve Bank President Robert Kaplan is expecting strong economic growth in the second half of next year.

He is relying on newly developed COVID-19 vaccines to be rolled out widely.

However, with cases surging now he sees a “very difficult” next three to six months.

Key notes via Reuters

  • Says sees ‘very difficult’ 3-6 months, but optimistic about next 12 months.
  • Could see recovery stalling in december and q1 2021, but strong growth in 2h 2021.
  • Says reluctant to make changes in asset purchases until more visibility on outlook.
  • Open-minded whether Fed should give more guidance on asset purchase plan at Dec. meeting or at later meeting.
  • Says fiscal aid would help limit scarring, speed recovery.

“If we can see the resurgence moderate, I think you’ll continue to see growth in the fourth quarter, and you might even see growth in the first quarter of next year, but right now, the trends at least in the virus don’t look like they are moderating,” Kaplan told Reuters in an interview.

“So we’re bracing ourselves here.”

Fed policymakers are gearing up for their next policy-setting meeting, in mid-December, as hospitalizations set records and some communities are re-imposing restrictions to bring rampant COVID-19 spread under control.

Kaplan said he expects the Fed to continue to discuss such guidance, he’s open-minded about when to deliver it:

“We are going to have to figure out whether it’s in the December meeting or a future meeting,” he said.

The US dollar has not reacted to the comments.

Dallas Federal Reserve Bank President Robert Kaplan is expecting strong economic growth in the second half of next year.

He is relying on newly developed COVID-19 vaccines to be rolled out widely.

However, with cases surging now he sees a “very difficult” next three to six months.

Key notes via Reuters

  • Says sees ‘very difficult’ 3-6 months, but optimistic about next 12 months.
  • Could see recovery stalling in december and q1 2021, but strong growth in 2h 2021.
  • Says reluctant to make changes in asset purchases until more visibility on outlook.
  • Open-minded whether Fed should give more guidance on asset purchase plan at Dec. meeting or at later meeting.
  • Says fiscal aid would help limit scarring, speed recovery.

“If we can see the resurgence moderate, I think you’ll continue to see growth in the fourth quarter, and you might even see growth in the first quarter of next year, but right now, the trends at least in the virus don’t look like they are moderating,” Kaplan told Reuters in an interview.

“So we’re bracing ourselves here.”

Fed policymakers are gearing up for their next policy-setting meeting, in mid-December, as hospitalizations set records and some communities are re-imposing restrictions to bring rampant COVID-19 spread under control.

Kaplan said he expects the Fed to continue to discuss such guidance, he’s open-minded about when to deliver it:

“We are going to have to figure out whether it’s in the December meeting or a future meeting,” he said.

The US dollar has not reacted to the comments.

In its latest market report, Citibank highlights downside risks for the global equities, especially for the Wall Street benchmarks, while citing the absence of further stimulus and the coronavirus (COVID-19) resurgence hit during the short-term.

Key quotes

Investors have become uninterested in worrying about downside risks.

Vaccine news has further buoyed spirits with several therapeutic/preventative lights now at the end of the pandemic tunnel being another set of positive data points.

The market is either “anticipating an even stronger 2021 profits outlook possibly tied to rapid inoculation-driven recovery and continued corporate cost containment, or the S&P 500 may be ahead of itself in the near term, particularly when considering no new short-term fiscal stimulus and the impact of second-wave outbreaks.

Bulls catch a breather…

Global equity market bulls stepped back at the end of November but kept the heavy gains earned through the month. The same highlights fears of a pullback in the equities.

Read: Wall Street Close: Snap-back as month-end profit bookings kick-in

In its latest market report, Citibank highlights downside risks for the global equities, especially for the Wall Street benchmarks, while citing the absence of further stimulus and the coronavirus (COVID-19) resurgence hit during the short-term.

Key quotes

Investors have become uninterested in worrying about downside risks.

Vaccine news has further buoyed spirits with several therapeutic/preventative lights now at the end of the pandemic tunnel being another set of positive data points.

The market is either “anticipating an even stronger 2021 profits outlook possibly tied to rapid inoculation-driven recovery and continued corporate cost containment, or the S&P 500 may be ahead of itself in the near term, particularly when considering no new short-term fiscal stimulus and the impact of second-wave outbreaks.

Bulls catch a breather…

Global equity market bulls stepped back at the end of November but kept the heavy gains earned through the month. The same highlights fears of a pullback in the equities.

Read: Wall Street Close: Snap-back as month-end profit bookings kick-in