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Economic outlook

Q4 2020: Further to go

The Q3 bounce has been stronger than expected, and consumers remain resilient. But with concerns about volatility rising and income still hard to find, it’s clear the challenges of 2020 are not over.

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October 8, 2020 | 28 minute read

The Q3 bounce has been much stronger than expected, creating optimism that the recovery has traction which will carry through the end of 2020. While consumer and business confidence has been resilient, our recovery has further to go, and the path ahead may get more challenging. For investors, equity valuations are near multidecade highs, uncertainty is rising heading into Q4, and income is evaporating. This perfect storm points to the need for diversification to manage volatility.

Key takeaways

  • The Q3 bounce has been stronger than we expected, and consumers remain resilient.
  • Economic dislocations are shifting from temporary to permanent.
  • Concerns about volatility are rising, and traditional fixed income is running out of room.

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Lara Rhame

Chief U.S. Economist + Managing Director
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