In the pessimistic scenario, a broad loss in confidence and growing aversion to risk lead to drops in a wide range of investment and consumer spending categories to end the expansion in its 135th month, a new record. In this simulation, business fixed investment is weaker than in the baseline. Potential growth as a result is also lower. With demand weak, inflation, as measured by the core consumer price index, has four-quarter growth drop from around 2.7% in the second quarter of 2020 to 2.2% in the second quarter of 2021.
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