ML-Implode News - The â€˜Great Repression' is here and it will make past downturns look tame: Rosenberg

In the "base case" for the U.S. economy, published by his firm, Rosenberg Research, the economy "reopens" in May, in a staggered approach across industries and regions. There are "periodic setbacks in terms of COVID-19 case counts...sufficient to make people less comfortable and confident about spending then they did prior to the crisis. A vaccine is not developed in this forecast, but treatment that alleviates the worst respiratory symptoms" is developed within the next six months, he writes.
What does that mean for the economy and financial markets?

A 30% contraction in real gross domestic product in the second quarter, negative year-over-year consumer price growth for 5 quarters, and an unemployment rate of 14.2% by the end of 2020, averaging 13% throughout 2021.

The 10-year Treasury yield TMUBMUSD10Y, 0.653% sinks lower and lower each quarter, to 31 basis points by the fourth quarter, and averages 18 basis points throughout 2021. Yields fall as bond prices rise.

Investors in high-yield debt run for the doors, leaving those bonds more than 700 basis points more expensive than Treasurys at the end of this year.

Relevant:

The â€˜Great Repression' is here and it will make past downturns look tame: Rosenberg