I’m very disappointed we could not be together again this year to discuss my original rosier economic outlook for 2020. I’m sharing the slide deck that I prepared for my original 2020 outlook in January before “pandemic” became the word of the year. I also kept my recap of what I had right and wrong about 2019. And then of course, I have prepared an addendum to the original forecast that includes the impact of the coronavirus and policy response.
Let me add a few things that are on my mind this morning.
- First, I hope you will all take care of the vulnerable and the health care workers in your network in whatever way you are able. They will truly need our collective support.
- Second, small business and their banks will be the key to our ability to resuscitate the economy, probably in Q3. You are the heart of our capitalist economy. The Federal government and the Federal Reserve are more accustomed to supporting large enterprises and public markets, but the translation of their efforts to small business is complicated. The relationship between businesses and community banks has never been more important.
- Third, the current market volatility will be with us until we can get a clearer reading on the path of the virus, the policy response, and the timing of the transition from the shutdown to some return to normal economic activity. That is still several weeks away as we don’t yet know the true rate of fatality, the capacity for treatments, the ramp up of widespread testing, and the economic policy response. Each data point will shift market participants probability assessments about the future and thus valuation.
- Finally, I still think the long term future of the U.S. economic is very positive. This episode will focus the best minds and companies and drive further transformative changes in our economy that will be relevant to Americans and people around the world. And we will emerge from this episode with a greater appreciation for science, education, and community.
I hope we can talk about these positive things a year from now.