. Confirmation of the package could be the thing markets need to kick-start a Santa rally heading into Christmas week, said Connor Campbell, a financial analyst at SpreadEx.
The Fed upgraded its economic projections on Wednesday, with members of the Federal Open Markets Committee now expecting US GDP to contract 2.4% in 2020 before rising 4.2% in 2021. Growth is seen reaching 3.2% and 2.4% in 2022 and 2023, respectively. The Fed pledged to continue to supply liquidity as long as there's a need, reinforcing the idea that the central bank won't allow inflation to get out of hand, said Paul Donovan, chief economist at UBS Global Wealth Management. "While we expect stocks to benefit further from positive news on vaccine rollouts and US fiscal support, the same cannot be said for the US dollar," said Mark Haefele, chief investment officer at UBS Global Wealth Management.
According to analysts, a US stimulus deal will be completed before a Brexit one. Time is fast running out and already it seems any agreement will have to be rushed through in a vote, with ministers recalled from the Christmas break beginning Thursday, said Craig Erlam, a senior market analyst at OANDA. The Bank of England is set to announce its latest monetary policy decision later the same day.
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