GDP is expected to fall by -32% in Q2, will not return to 2019 levels before 2022. The Fed systematises yield curve control. End of interest rate volatility. Complacency on equities.

Key points

• Annualised GDP contraction of -32% in Q2?
• GDP contraction of -5.5% in 2020 followed by a +3.9% recovery in 2021
• Sharp rise in budget deficits, debt and the Fed’s balance sheet
• Towards an institutionalisation of yield curve control by the Federal Reserve?
• Disappearance of volatility in US interest rates
• The dollar remains the preferred currency
• -44% collapse in corporate profits in Q2
• Negative impact of a Democratic victory
• Excessive optimism in equity markets

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