Macroeconomic & Geopolitical

The Fed Upgrades Forecast & Downgrades Dots

September 2020 – 3 min read
The Fed signals no rate hikes through 2023 amid a slow return of inflation. Yoshihide Suga, Japan's new prime minister, should continue Shinzo Abe's platform with a smooth transition, while global flash PMIs next week should shed light on how the recovery is unfolding in September.


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


  • Housing data are expected to show continued strength in August amid massive government support, new and pent-up demand, and record-low mortgage rates.
  • The Markit flash PMIs for September are expected to remain in expansionary territory. We look for differentiation between manufacturing and services, as well as forward-looking indicators, such as new orders to gauge demand, particularly given heightened uncertainty surrounding further fiscal support and slower retail sales growth in August.


  • The September Flash PMIs for major European economies will be released on Wednesday. After rebounding strongly out of the lockdown-induced collapse, PMIs plateaued in August. The September releases will give precious insight into the strength of the recovery.

Asia Pacific

  • The PBOC is expected to keep the one- and five-year loan prime rate steady at its September 21 meeting, as internal demand continues its impressive rebound.
  • Japan’s PMIs have lagged those of most major economies so far, as they entered and exited lockdowns on a later timeline. With both manufacturing and services PMIs remaining in contractionary territory through August, we watch to see the extent of improvement in September.

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Christopher Smart, PhD, CFA

Chief Global Strategist & Head of the Barings Investment Institute

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