Goldman Sachs is growing more bullish on the US economy and has raised its GDP forecast after Democrats took the Senate

Goldman Sachs is growing more bullish on the US economy and has raised its GDP forecast after Democrats took the Senate

The US economy suffered a record contraction in the second quarter of 2020.

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Goldman Sachs has upgraded its outlook for the US economy this year, after the Democrats won control of the Senate, which increases the likelihood of more fiscal stimulus early on to combat the fallout from the coronavirus pandemic.

In a tight run-off election on Wednesday, Raphael Warnock and Jon Ossoff defeated their Republican rivals, handing control of the Senate to the Democrats for the first time since 2015 and giving the party unified control of government for the first time since 2011.

"With control of the Senate by a narrow margin, Democrats are likely to pass further fiscal stimulus in Q1 that we expect to total about $750 billion, including $300 billion in stimulus checks," Goldman Sachs said in a note.

"However, discouraging news on the virus front - including the slow pace of vaccination and the emergence of more infectious virus strains - suggests the spending boost from stimulus will be more lagged than usual," they said.





Goldman Sachs expects the economy to expand at a rate of 6.4% in 2021, compared with a previous forecast of 5.9% and a consensus forecast of 3.9%, making it