Following a strong but partial and uneven rebound in real GDP growth in the third quarter, latest surveys and high-frequency indicators signal that euro area economic activity lost momentum going into the fourth quarter. The resurgence in COVID-19 infections is weighing on services sector activity in particular, which is especially vulnerable to the voluntary and mandatory social distancing measures introduced.
A recent study by a Federal Reserve economist, Wayne Passmore, attempts to quantify the value of that implicit subsidy to the private shareholders of Fannie and Freddie. His research indicates that it may account for more than half of the stock market capitalization of these institutions.