A few brief excerpts from a research note by Merrill Lynch Global Economist Ethan Harris: A light at the end of the COVID cave
Normally we write about COVID news in the back, but now it deserves front-page coverage; With COVID cases falling and vaccines accelerating, this is probably the beginning of the end of the COVID crisis. Here we argue:
• Renewed restrictions and the end to the holiday season seem to be bending the cases curve.
• The vaccine rollout should continue to accelerate as new resources and effort is put into the project.
• There is one major caveat: new more contagious strains have arrived in the US.
…
What does this mean for the economy? We continue to see upside risks to our above consensus forecast. We think the vulnerable population will be inoculated by March/April, cutting hospitalizations dramatically, and allowing a partial reopening. Michelle Meyer and team have already boosted their GDP forecast for 2021 from 4.6% to 5.0% based on a somewhat earlier and bigger stimulus package. Moreover, like most forecasters they have not incorporated the impact of a second package.