GS updating their outlook over the weekend following COVID-19 developments since since Friday

From the note (Bolding mine … wow)

  • On Friday morning, we downgraded our baseline view of global GDP growth in 2020 from just over 3% to around 2% on the back of developments related to the coronavirus, with weakness concentrated in the first half of the year. We also changed our Fed call to project 75bp of rate cuts by June, starting with a 25bp cut on March 18.
  • Since then, the news on the outlook has remained negative, with significant further increases in infections outside of China and an exceptionally weak China PMI release.
  • Moreover, the statement by Fed Chair Powell on Friday afternoon that the Federal Reserve is 'closely monitoring" developments and 'will use [its] tools and act as needed to support the economy' strongly hints at a rate cut at or even before the March 17-18 FOMC meeting.
  • Based on these developments, we are making a further adjustment to our Fed call to project a 50bp rate cut by March 18 followed by another 50bp of easing in Q2, for a total of 100bp.
  • clear signal in Chair Powell's statement


  • We are also forecasting rate cuts by most other G10 (and some EM) central banks. including a cumulative 100bp of cuts in Canada, 50bp in the UK, Australia. New Zealand, Norway, India and South Korea, and 10bp in the Euro area and Switzerland.