FXStreet reports that Lisa Shalett, Chief Investment Officer, Wealth Management at Morgan Stanley, expects the US economy to surge early next year.

“Never before have we seen such high unemployment (currently 6.7%) accompanied by rising personal incomes, a savings rate that has doubled in one year, lower credit-card balances and higher net worth. The power of increased spending capacity matched with pent-up demand for deferred vacations, restaurant meals, sporting events and entertainment could fuel economic growth, as the pandemic starts to recede sometime next year.”

“Federal Reserve stimulus has dramatically expanded the money supply. Price declines in the service sector, due to the COVID-19 recession, have so far helped to mask that pressure on inflation. But if services inflation returns to its three-year pre-pandemic trend of roughly 3%, the Consumer Price Index, a key gauge of inflation, may quickly overshoot the Fed’s 2% target next year.”