Macroeconomic & Geopolitical

Cautious Consumers Await Fourth Fiscal Stimulus Bill

July 2020 – 3 min read
U.S. politicians will continue negotiating the next fiscal package. The July employment report will likely be weak due to rising uncertainty, cautious consumers, and greater restrictive measures. Meanwhile, next week's BoE meeting is expected to strike a bearish tone.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • Congress is scheduled to begin its recess on August 10 (through September 7), meaning pressure is mounting for passage of the fourth fiscal stimulus bill next week.
  • There is rising evidence that the July employment report will be weak and possibly negative due to rising uncertainty, cautious consumers and greater restrictive measures; the consensus estimate is for a 1.875 million increase. If employment takes a step back, it will likely be temporary before resuming its more moderate and wavy recovery, assuming a fourth fiscal bill is passed with sufficient income support for those without work—which we will continue to monitor.


  • Next week’s BoE MPC will remain bearish. Inflation hovers at 0.6%, well below the 2% target, and there are downside risks related to virus recovery uncertainty and Brexit. The option exists to cut the policy rate into negative territory (currently at the effective lower bound), but benefits are unclear. The BoE may choose to use this extra policy space only if necessary, and with more data in hand.

Asia Pacific

  • The Caixin China PMIs are expected to remain in expansion territory, but data point to a more modest pace of recovery after the release of pent-up demand.

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Christopher Smart, PhD, CFA

Chief Global Strategist & Head of the Barings Investment Institute

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