The tug of war between general domestic resilience and external headwinds has continued over the past month, with the effects of slower global growth, rising trade tensions vis-à-vis China and lingering policy uncertainty now visibly washing up on US shores. We forecast year-on-year GDP growth cooling to 2% by end-2019 and averaging 1.6% in 2020, 0.2ppt lower than last month, as new China tariffs further weigh on economic momentum. The Fed will likely proceed with three additional 25bp rate cuts before the end of the year.
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