2020 is likely to be another year of sluggish growth with continued risk of a sharper downturn. There will be a lot at stake in the 2020 U.S. presidential elections as Republicans and Democrats wrestle to take control of the White House, the Senate, and the House. The outcome will influence everything from Wall Street and the economy to businesses and trade policies. Against this backdrop, the Federal Reserve has signaled a pause on additional interest-rate cuts. And the likelihood of a recession in the United States remains low.
Elsewhere in the world, governments — including New Zealand and Japan — are turning on their fiscal stimulus taps to boost their economies. This shift comes as many central banks join the Fed and the European Central Bank (ECB) in pausing the global wave of monetary easing amid negative interest rates. And finally, understanding the interplay between economic growth, rates, and financial markets will become even more important for investors and central banks alike this year.