Global economy to suffer worst peacetime slump in 100 years, OECD says – as it happened | Business

Global economy to suffer worst peacetime slump in 100 years, OECD says – as it happened | Business


It is unlikely that the FOMC’s GDP forecast will be much higher than 2.5%, as the Fed can explain such a modest increase in the light of a wide output gap that will take time to recover.

A much stronger GDP growth forecast would certainly come to the attention of bond investors, who might think that this would mean a faster-than-expected normalisation of policy.

It would also be a surprise if the Fed deviated much from its recent messages to the market of being there to provide policy support for the economy.

Fed Chair Powell might also want to again send the message that accommodative policy will be in place for some time – i.e. dovish forward guidance. The potential upset today is that Fed Chair Powell sends an inadvertent hawkish message and/or highlights concerns with new highs in equity markets.



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