The COVID-19 Recession: Sharp but Short?

Jim Cielinski, Global Head of Fixed Income, discusses the economic impact of COVID-19 and why he believes, despite the severity of the downturn, it could end up being one of the sharpest but also one of the shortest recessions on record.

Key Takeaways

  • The severity of the economic impact from the COVID-19 crisis is as bad as we thought, with Q2 likely to be one of the worst quarters of growth on record.
  • But markets respond to change, and the potential for near-term growth and repair as economies come out of lockdown, coupled with aggressive fiscal and monetary stimulus, is allowing markets to seemingly disconnect from the economy. Without another shutdown, however, what markets are beginning to price in is understandable.
  • For those that do have a longer horizon, if we can get growth going again, we might be able to look at this in the rearview mirror and say it was one of the sharpest but also one of the shortest recessions on record.

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