Welcome to Thoughts in the Market. I'm Andrew Sheet's chief process asset

strategist for Morgan Stanley. And I'm Ellen Zettner, Morgan Stanley's chief

U.S. economist. And on this special mid-year outlook edition of Thoughts in the

Market, we'll be talking about the outlook for the U.S. economy. It's Thursday,

May 27th, at 3 p.m. in London. And 10 a.m. in New York. So Ellen, let's start at the top.

We've just gone through a large collaborative process at Morgan Stanley

research thinking about our outlook for the year ahead. How are you thinking about the U.S.

economy and how strong do you think growth could be over the next 12 months?

I think growth is going to be very robust this year. That may not be very surprising to hear

given that we're coming out from under the cloud of COVID. But we're looking for 8% GDP growth

this year on a Q4 over Q4 basis. And I think it's all due to reopening. How much consumers want

to reengage with the economy? How much do they want to pull down of that trillions of dollars

in excess savings? How many jobs will we bring back? And so I think all of that is looking quite

positive for the U.S. And it's not without its risk, right? COVID is still the number one risk

to the growth outlook. For instance, if we go in to the fall and winter and variants come about

that we're not able to battle with the vaccines or there's not a great take-up rate in terms of

boosters that we need to get. So in other words, households retreat. But there are also upside

risks. You could have a much greater return to the labor market and a much more reduced work

from home environment than we expect. You could have fed policy that remains even more supportive

or longer, more fiscal policy stimulus, for instance. So there are a lot of upside risks as well.

But I'm feeling pretty comfortable with where we are on our growth outlook.

Now, the flip side to stronger growth is that with stronger growth often comes somewhat higher

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