Report
United States: What consequences if growth slows down, but there is no recession, and economic policies are stimulatory?
If there was a recession in the United States, as in the past, the external deficit would decrease and the dollar would appreciate as a result of the rise in risk aversion. But the most likely scenario for the United States today is different: A slowdown in growth that does not turn into a recession; As a result, an unemployment rate that remains close to the structural unemployment rate; But as a result of the slowdown in growth, economic policies (fiscal, monetary) that become stimulatory, as we can see already; Leading to a sharp increase in the US external deficit that benefits other countries, especially China and the European Union, Latin America and Mexico; And hence a marked depreciation of the dollar (external deficit that is difficult to finance and low interest rates).
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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