Macroeconomics – Putnam Perspectives

From V-shaped recovery to bond vigilantes

The Federal Reserve remains dovish on monetary policy as bond market vigilantes push yields higher.

We believe that pandemic-related bottlenecks have temporarily lifted U.S. inflation. Still, the underlying inflation trend is weak.

It is strategic for the U.K. to have a trade deal with the EU given the short- and long-term negative effects of Brexit.

The U.S. labor market continues to lose steam as fewer Americans were able to find work amid surging Covid-19 cases.

Oil prices are likely to trend slightly higher as OPEC+ mulls maintaining lower output in 2021 and demand recovers in key markets such as China.

Governments are trying to calibrate their policies to support growth as “fiscal cliffs” loom amid a resurgence in the virus.

U.S. election politics are playing out against a backdrop of an easing recovery, rising COVID-19 cases, and a potential new vaccine.

China is leading the economic recovery among emerging-market countries, buoyed by stimulus and stringent COVID-19 measures.

Fiscal and monetary policies will be central to the economic recovery between now and the availability of a COVID-19 vaccine.