Banks voiced gloomy forecast for US economy

US, WASHINGTON (ORDO NEWS) — The gloomy future of the American economy. After the shocking report on the labor market – in March the United States lost 710 thousand jobs – banks began to give even more apocalyptic forecasts for GDP.

So, Morgan Stanley predicts a decline in the second quarter by 38%. But most importantly, the bank’s analysts finally buried the still remaining idea of ​​a V-shaped recovery. The economy will need, at best, 18 months to return to normal.

Another bank – Goldman Sachs warns of the difficult fate of the corporate sector. It will take companies 4 years to restore profits to levels at the beginning of this year.

This year, they are expected to lose about half of their profits, but next year there will be a sharp rebound of 51%, and in 2022 the figure will increase by 11%.

By the way, the decline this year will be stronger than in 2008, which means the phrase “since the collapse of Lehman Brothers” will become history. And the coronary crisis will be a new starting point.

However, the situation in the financial markets may develop in a slightly different way. The Federal Reserve pumped a huge amount of cash into the system. Already, banks do not even need them, several repo auctions were held almost without demand.

This money will be primarily used to buy assets, and now we see signs of recovery. It is possible that the stock market on expectations alone will show new historical highs, and even long before the economy returns to normal.

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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.