SMM: Friday, November 6th, Zandi (Mark Zandi), chief economist of Moody's Analytics firm (Moody's Analytics), warned that given the continued spread of the epidemic in the United States and the lack of additional support measures, although the U.S. economy has shown signs of recovery, the future outlook may still be reversed. The US Senate and House of Representatives may be controlled by different political parties, which means that there will be no large-scale fiscal rescue package, leading to a slowdown in US economic growth. Mohamed El-Erian, Allianz's chief economic adviser, also warned that a split in Congress after the US election would bring trouble to the US economy and even drag down the global economic recovery.
Economists warn that the risk of a recession in the US economy is "quite high"
As early as September, the IMF predicted that the US economy would contract by 4.3 per cent this year. That was much better than the 8 per cent contraction expected, as the global economy showed signs of a faster recovery, IMF said.
Zandi, chief economist at Moody's Analytics, said he believes the risk of a U. S. economic downturn is quite high. The epidemic in the United States has worsened. Just four or six weeks ago, the United States had only 40, 000 new cases a day, but now it is close to 100000, which will begin to cause some damage to the US economy.
According to data compiled by (Johns Hopkins University) of Johns Hopkins University in the United States, more than 100000 new cases of COVID-19 were found in a single day for the first time in the United States on November 4. So far, the number of confirmed cases of COVID-19 in the United States has reached more than 9.6 million, the largest number in the world.
Zandi believes that the surge in cases could cause the United States to follow in the footsteps of Europe, where the outbreak trajectory is about four to six weeks earlier than in the United States. He pointed out that Europe had to re-implement social quarantine measures to contain the resurgence of epidemics that could cause economic losses.
The economist also warned that the lack of economic support from the US government is worsening the outlook for the US economy. It is likely that the United States will not have additional financial support in the short term, at least until the president takes office in January. As a result, the US economy is quite fragile. Many of the measures in the Nursing Act, America's $2 trillion bailout plan, have expired or are about to expire. Negotiations for further support reached an impasse as Republicans and Democrats were unable to agree on the size of the bailout package and spending measures.
Senate Majority Leader Mitch McConnell said on November 4th that a new stimulus bill would be his top priority. But Nobel laureate Krugman (Paul Krugman) said in an interview on Nov. 5 that there was no sign that McConnell would agree to a bailout plan big enough.
The election could cause the United States to face a divided Congress, thus causing trouble for the economy.
At present, the situation in the US general election is still tight, and the Trump campaign has launched a lawsuit over the counting of votes in "swing states". NBC (NBC News) expects Democrats to continue to control the House of Representatives, but their chances of winning the Senate have declined.
Zandi warned that the Senate and House of Representatives could be controlled by different political parties, meaning that there would be no large-scale fiscal rescue package, which would slow US economic growth and take longer to return to full employment.
In fact, Zandi is not the only economist who is pessimistic about the future economic outlook of the United States. Adrian, Allianz's chief economic adviser, also warned that a split in Congress after the election would bring trouble to the US economy.
In his view, the 2020 election will prove that the United States is still a deeply divided country, facing more and more challenges that threaten this generation and future generations. Despite the severe health and economic crisis, the United States seems neither willing nor able to take the necessary decisive measures. The reason is that there are fundamental differences on how to best implement economic and financial reforms while urgently responding to the threat of the epidemic, because Congress is likely to be divided, with the Senate and House of Representatives controlled by different political parties.
Erian believes that if Biden does win the presidential election, there may be a difficult time before he enters the White House. There is unlikely to be much cooperation between the Trump administration and its successor, adding to the uncertainty in the coming months. As a result, the US economy, while showing signs of recovery, could get worse.
In addition, the Fed will once again be forced to do more to boost the economy. Because its policy tools will become less and less efficient, the Fed is likely to boldly try larger, unconventional monetary policy. This will do little to really stimulate the economy, on the contrary, it may further distort financial markets, all of which will exacerbate the threat of financial instability.
Erian pointed out that the current US economy faces many of the above-mentioned challenges, which will make the short-term and long-term economic outlook more difficult. It is worth noting that the plight of the United States has also brought problems to the global economic recovery, which is more likely to become more unbalanced and uncertain.
Huitong warned that gold surged 2.46 per cent in the last session to an one-and-a-half-month high as Biden's growing chances of winning the tight US election boosted hopes of a bigger stimulus. But if, as experts warn, there is a split Congress after the US election result, the stimulus package may not be passed soon, thus limiting the upside of gold prices. Affected by these concerns, gold prices weakened slightly on Friday, losing the 1940 mark at one point, and are now trading at 1941.98 US dollars an ounce, down about 0.41 per cent.
