Weekly Economic Update
In our view, the recent economic data confirm that the US economy is quite advanced in its rebound from the COVID crisis – and that a slowdown from recent booming growth to the previous trend of around 2% is likely far sooner than expected by the consensus. Indeed, the US is so advanced in achieving a post-COVID equilibrium that investment opportunities are better now almost anywhere else in the world. The US – and particularly the economically important Northeast – was among the hardest hit by COVID, leading to an extraordinarily aggressive response in both fiscal and monetary stimulus and rapid development and deployment of extremely effective vaccines. The flood of liquidity allowed the marketplace to pick winners and losers, returning the economy to the pre-COVID level of output far faster than expected – but with a different mix of jobs, profitable businesses and politics than before. Critically, the effective global isolation caused by COVID travel restrictions focused the success of US policies primarily on the domestic economy.