All elections have implications for the wider economic outlook, but given that the US economy (around US$22trn in GDP) is the world’s largest and touches most parts of the global system, the 2020 election result has particular nuances – especially in this time of Covid-19.
“It was an eventful year; certainly with Covid, the unprecedented declines in GDP and spikes in unemployment,” reflects Deutsche Bank’s US Chief Economist Matthew Luzzetti in this last episode before 2021 of Trade Finance TV.
But, he adds, it was the huge fiscal and monetary response that was critical to the “V” shaped recovery the US has managed so far.
With Joe Biden having been confirmed as President-elect by the Electoral College vote the day before we recorded this episode, the outlook for multilateral trade is potentially one of a change in tactics, he explains. The new administration will still seek to protect American jobs and support US manufacturing, but, says Luzzetti, “We will see a ratcheting down of some of the tensions”.
As for the US dollar, he anticipates a “messaging difference” with former Federal Reserve Chair Janet Yellen in the top Treasury post – an appointment unlikely to be voted down by the Senate whatever its composition.
In short, this was a rollercoaster year, but there are grounds for optimism in 2021. Tune in and hear more insights from Matthew Luzzetti about Covid-19 responses, trade, and what we can expect from the 46th President, Joe Biden
- Matthew Luzzetti, US Chief Economist, Deutsche Bank Research
- Clarissa Dann, Editorial Director, Deutsche Bank