US: Sharp GDP contraction – Danske Bank

There is no question we are in the middle of a deep recession and the only question is whether it will be a short-lived/technical one or a long-lasting one, analysts at Danske Bank brief.

Key quotes

“We have updated our GDP growth forecasts and now expect GDP to contract by 3.9% q/q in AR in Q1 and by - 18% q/q AR in Q2.”

“We expect GDP growth to be 13.0% q/q AR in Q3 and 7.9% q/q AR in Q4. In total, we expect GDP growth in 2020 to be -1.9% rebounding to 3.1% in 2021.”

“We think it was a very positive sign that the Fed has scaled-up its easing, in particular by making its new QE programme open-ended.”