Second Wave and Economic Warnings Impact Confidence

On Wednesday, the OECD announced that the world would enter into the deepest recession in 100 years. At the end of the same day, Federal Reserve Chairman, Powell briefed the country (US), saying that it could take years for US to fully recover from the pandemic. Slow economic activity would persist, and unemployment would likely remain at 10%. Rates are now forecast to remain at zero until the end of 2022. Fed Chairman, Powell called into question the uncertain impact on the US consumer (a key driver in a US economic growth cycle) stating that it was quite unclear how consumer spending habits will be impacted. He said the Fed would remain accommodating.

Added to this, concerns in key central and western US states came into light with sharp rises in COVID-19 cases. A second wave looks dangerously closer, and this will hit the domestic recovery and have a knock-on impact in international trade.

The outlook remains uncertain.

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