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Market perspectives: October 2020

27 September 2020 | Markets and economy

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In this latest Market Perspectives issue, we highlight the Vanguard house view on a number of current macroeconomic and market topics including monetary policy, economic growth, currencies, trade, asset returns and more.

Key highlights for this month

  • It will take until the end of 2021 for U.S. GDP to return to pre-COVID levels
  • Vanguard expects agreement on a continuing resolution to fund the government at least through the election
  • Monetary policy should remain loose into 2021, with risks skewed toward further easing
  • Global trade is poised for a sharp rebound through October, followed by a slower recovery
  • Vanguard expects core inflation to remain below 2% over the medium term
  • The United States will finish 2020 with an unemployment rate in a range of 7% to 9%

Asset class return outlooks

Our ten-year, annualized, nominal return projections, as of June 30, 2020, are shown below. Please note that the figures are based on a 1.0 point range around the rounded 50th percentile of the distribution of return outcomes for equities and a 0.5-point range around the rounded 50th percentile for fixed income.

Asset class return outlooks

These probabilistic return assumptions depend on current market conditions and, as such, may change over time.
IMPORTANT: The projections or other information generated by the Vanguard Capital Markets Model® regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.
Distribution of return outcomes from the VCMM are derived from 10,000 simulations for each modeled asset class. Simulations are as of June 30, 2020. Results from the model may vary with each use and over time. For more information, see page 4.
Source: Vanguard Investment Strategy Group.


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