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Vaccine improves economic outlook… with caveats

A vaccine with a 90% efficacy rate would clearly represent a major boost for both public health and the economy. While there remain issues around the likely speed of production and distribution of the Pfizer vaccine, today’s news raises the chances that other producers will develop a similarly effective vaccine. If so, this would lead us to bring forward some of the recovery in GDP in our forecasts to 2021. But it would not change our view that monetary policy will have to stay extremely loose for many years to come.

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