Goldman Sachs has gamed four omicron outcomes: “severe downside”, “downside”, “false alarm”, and a surprise “upside”. These scenarios have starkly different implications for asset prices and macroeconomic policy over the next year. Get it wrong at your cost.
You can already see this tension playing out in wild moves on global bourses, or in oil prices, with each snippet of fresh information.
Markets have taken a fresh beating this morning on warnings from Moderna that it is “not going to be good” for the existing vaccines. But if the disease is indeed milder, a slippage in antibody protection levels may not matter, and we still have T-cell memory as the next line of defence.
For the sake of argument – as a Gedankenexperiment – I assume that the benign picture from South Africa holds up over the winter and that we will land at the optimistic end of the Goldman spectrum.
"The dam will break across the world rapidly if omicron proves to be as mild as it looks and wins the transmission contest against delta," writes Ambrose Evans-Pritchard.
"The urge for normality will overcome all else" https://t.co/vgXEIw6CL8
— The Telegraph (@Telegraph) November 30, 2021