The expiration of the temporary SLR changes should enhance the soundness of the banking system, but likely at the cost of Treasury market liquidity.

The Federal Reserve’s communications following its March meeting should help anchor inflation expectations.

The COVID-19 relief bill has spurred talk of inflation, but financial stability may be a more relevant risk.

A large fiscal package geared toward pandemic relief will likely boost U.S. growth even further in 2021, but long-term inflationary risks are still balanced.

With a narrowly Democratic Congress, U.S. fiscal spending is likely to increase on economic relief from the pandemic, infrastructure, and healthcare, boosting the economic rebound.

Rising prices in July have led PIMCO to raise its core inflation forecast for 2020, but not 2021.

The Federal Reserve wants financial conditions to remain accommodative as it looks to support the U.S. recovery.

European measures applied to mitigate the effects of the pandemic have contained the unemployment rate in Europe more than in the U.S. While recognizing economic risks from the rising number of COVID-19 cases in the U.S., our forecast sees this success ratio reversing before the end of the year.

We expect more stimulus, both monetary and fiscal, will be necessary to support the recovery amid the renewed COVID-19 outbreak.

We expect the Federal Reserve will continue to conduct asset purchases at its current pace through year-end, and eventually commit to keeping interest rates on hold through 2022. This should help ensure easy financial conditions and support the economic recovery.

The U.S. political focus has shifted to the reopening of the economy.

Over the next several quarters, monetary conditions will likely be set not only by Fed balance sheet policies, but also by the expected path of interest rates.

The U.S. labor market disruption is the worst the country has experienced in recent memory, suggesting that the decline in overall activity could also be much more severe.

The Fed has moved aggressively to stabilize core assets, including mortgages. Yet several market indicators are still concerning.

The $2.2 trillion stimulus is the biggest ever, but the U.S. Congress may be forced to do even more.

Canada’s economy may be at greater risk for lasting damage, but we believe Ottawa is well-positioned to respond.

The Fed’s aggressive support may help keep markets functioning, hasten recovery and avoid longer-term damage.