A new Covid-19 outbreak in several states in July and August imposed more caution in reopening the economy, slowing recovery momentum. The labour market remain distressed. In the coming quarters, the US economy is expected to continue along a gradual and progressive recovery path, underpinned by easy monetary policy and a delayed new round of fiscal support.

We expect quarterly growth to remain supported by recovering domestic and external demand, although uncertainty stemming from November elections may delay new investments. Inflation, which has been more volatile due to lockdown-induced distortions, will gradually return towards target, with temporary mild overshooting in mid-2021 due to energy base effects.