US Federal Reserve officials believe that there is a ‘clearer focus’ towards economic recovery, predicting an ‘impressive’ year ahead in 2021.
Even as they concede the riots by supporters of President Donald Trump that shut down Congress last week and concerns about continued violence pose a risk, officials say the transition to a new administration on Jan 20 and a likely accelerating vaccine rollout have left them optimistic.
The incoming administration of President-elect Joe Biden has said it plans to speed vaccine distribution, and outgoing Trump administration officials may move soon to recommend on its own that age limits be lowered and other rules be loosened so more people can get shots now.
For the Fed, even though the country’s short term political and health risks seem great, they have focused on the more positive prospects of the medium term.
Some are even suggesting the strength of the ensuing recovery accelerating their plans to pull on some of the steps taken this year to battle the COVID-19 recession.
Even those arguing policy will likely remain on hold point to consumers’ still-amply-stuffed war chests from last year’s federal relief efforts, including a $900 billion re-topping of aid approved just before year end.
“We have a trillion (dollars) in excess savings. We have checks coming in the mailbox. There will be enough demand” from consumers to keep the recovery on track,” its vice chair Richard Clarida said last week, forecasting an ‘impressive’ 2021.
If 2020 was when shutdowns and disease took the economy to “new and unfamiliar places”, Richmond Fed president Thomas Barkin said: “The future has finally come into clearer focus, with vaccines likely leading to a fuller reopening by midyear”.
Meanwhile, Pfizer Inc expects 2021 earnings of between US$3 and US$3.10 per share, CEO Albert Bourla said at a J.P. Morgan healthcare conference yesterday.
Wall Street analysts on average expect Pfizer to earn US$3.07 per share, according to IBES data from Refinitiv. – Jan 13, 2021