20% of the excess savings will be spent in the first year – Goldman Sachs

Goldman Sachs rekindles its market optimism based on the hopes of further spending in the latest report. The forecast also expects recovery from the coronavirus (COVID-19) pandemic, normal life, during the mid-2021.

Key quotes

Households have already accumulated about $1.5 trillion in 'excess' or 'forced' savings.

We expect that to rise to about $2.4 trillion, or 11% of GDP, by the time that normal economic life is restored around mid-year.

FX implications

Given the increased pace of chatters favoring the nearness to the US covid stimulus, coupled with a recovery in the global covid conditions and upbeat vaccine developments, reports like this should add to the risk-on mood. That said, S&P 500 Futures stays firm around the record high of 3,951.88 by press time of Tuesday’s Asian session.

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