RaboResearch - Economic Research

Economic Report

United States: Civil unrest

The resurgence of COVID-19 in the United States reflects the failure of institutions. Protests in the streets reveal a polarized society and a lack of trust in institutions that predates the outbreak of the virus. No matter who wins the elections, the civil unrest is not likely to pass.

Economic Report

Which jobs are vulnerable in the six-foot economy?

The United States might be stuck with a so-called ‘six-foot economy’ for a considerable period of time in order to prevent a re-emergence of the COVID-19 virus. Our main finding is that 23% of all US jobs might face problems to adapt to such an economy. Occupations in healthcare (60% vulnerable jobs), air transport (59%) and the hospitality sector (49%) are especially vulnerable.

Special

Looking beyond the COVID-19 crisis

While we currently expect a V-shaped recovery for the global economy, there is a clear risk of a more U-shaped or even L-shaped recovery. There could also be effects on global growth beyond the 2021 horizon. We expect annual structural growth (up to 2030) in the US to drop from 1.6% to 1.4%. For the Netherlands, structural growth is set to decline from 1.3% to 1.1%.

Economic Report

The US recession of 2020 - The horror version

We expect US GDP to fall by 6% in 2020. After a sharp supply-induced contraction in March we expect the economy to rebound after the lockdown is over. However, the damage done to demand is likely to remain a drag on the economy for years.

Economic Report

US helicopter money

The US federal government is considering sending ‘helicopter money’ to Americans as an attractive alternative to outright monetary financing. This can be effective in slowing down a sharp decline in consumer spending, although it will probably not be enough to bring the economy back on an upward growth path.

Special

Trade deal China-US: Phase One, Phase None

The Phase 1 trade deal signed by the US and China in January 2020 has created a temporary but unstable equilibrium. The deal could still collapse and a re-acceleration of trade tensions in 2020 remains our base scenario.

Economic Comment

Trump: graven de Democraten een kuil voor zichzelf? (Dutch)

Zolang voldoende Republikeinen in de Senaat achter Trump blijven staan, wordt hij niet uit zijn ambt gezet. De start van het impeachment-onderzoek door de Democraten in het Huis van Afgevaardigden kan echter wel een averechts effect hebben op de kans voor de Democraten om de presidentsverkiezingen te winnen.

Special

Trump: Impeachment without conviction

The Democrats in the House of Representatives have decided to start an impeachment inquiry against President Trump. While impeachment is possible as the Democrats have a majority in the House of Representatives, conviction is unlikely as long as the Republicans in the Senate continue to support their President.

Economic Report

Recession and CLOs

While CLOs performed well during the last crisis, and there is less dependence on short-term wholesale funding, the rise of loans with reduced investor protection and illiquidity are risk factors that could turn a run-of-the-mill recession into something worse.

Economic Report

Recession United States on the radar

Our early warning system based on the yield curve continues to point at a recession in the United States in the second half of 2020. However, our ‘recession radar’ suggests that the US economy is not in recession yet and is not likely to be in the near term.

Economic Report

United States: Return of the US debt ceiling

After being suspended for about a year, the debt limit returned on March 2. However, the Treasury Department will take extraordinary measures that could delay a federal government default to September or October.

Economic Report

National emergency on the US-Mexico border

President Trump declared a national emergency on the US-Mexico border that will allow him to divert funds to build the wall. The Democrats are likely to challenge this decision, bringing the country closer to a constitutional crisis.