March Global Macro Monthly - The great rate debate
- Growth rebounds remain virus and vaccine dependent. The outlook is solid in US and good in the UK. Euro area prospects are hampered by vaccine management. Japan is also overseeing a slow inoculation programme. The pace is mixed across Emerging Markets.
- Fiscal stimulus is super-charging the US outlook but creating uncertainty over inflation. Headline inflation will rise globally across 2021, but a sustainable return to central bank inflation targets is unlikely next year outside the US or EM’s with loosely anchored expectations.
- Central banks reflect local conditions. The Fed has pushed back on premature tightening; the ECB promised additional PEPP purchases. But EMs with inflation pressure and volatile FX have started to raise rates.
- Bond yields have risen in the US and are having spillover effects elsewhere. Other asset classes are following reactions in real rates space.
This section is for professional investors only. You need to confirm that you have the required investment knowledge and experience to view this content. This includes understanding the risks associated with investment products, and any other required qualifications according to the rules of your jurisdiction.