US Outlook 2020: Trade truce, but no growth rebound

The US economy is in slowdown mode. We expect growth to slow further this year, as the weakness in manufacturing weighs on consumption and services. The pause in the trade war will probably hold until the November election, but the risk of a re-escalation after will continue to weigh. The slowdown is in any case not all about the trade war – globally tight financial conditions have also been a factor. Downside risks to inflation bolster the case for another rate cut by the Fed. Policy will in any case remain accommodative. History favours a Trump win in the presidential election, but it is still early days, with the Democrat primaries just beginning.