Slowdown, but no recession

- "The switch from an inventory-stimulus driven recovery to a demand driven recovery has proved tougher than expected, as job and spending dynamics remain weak."
- "In the coming quarters, growth will remain below par as the manufacturing cycle will slow and fiscal tightening will provide headwinds to final demand. However, the risk of recession is limited."
- "Economic growth will return to an above trend pace in 2011. Easy financial conditions, easier access to credit and pent-up demand will help the needed rotation towards more demand-driven growth."
- "Core inflation is expected to slow toward 0.5%, while headline inflation will move back into the 1.5-2% range. The risk of outright deflation remains relatively low."
- "Fed hikes have been postponed to H1 12 and the softer outlook increases the possibility of further Fed easing. Currently, we attach a 40% probability to the Fed resuming large scale asset purchases."

DenDanske Research US 20100913

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