One year after the launch of anti-Covid vaccines, financial markets have been willing to move beyond the pandemic while the economy has not. We see this with the disruptions among supply chains, particularity labor and commodity markets. The longest economic expansion in American history – 128 months – has been followed by the shortest recession […]
The demand recovery following 2020’s historic pandemic recession has been concentrated in goods and has pushed supply chains to their limits, extending delivery times to records and boosting prices and volatility in growth and inflation. Supply shortages are raising current inflation, while secular forces that alter the balance of supply and demand and sustain high […]
There has been mounting evidence that the pace of the global recovery has slowed. In many economies, it reflects increased consumer caution about high virus cases and shortages limiting how fast economies can grow. The shortage of semiconductors and the current logjam that is taking place at ports along the west coast of the U.S. […]
Market volatility returned in September as China’s Evergrande debt crisis, the global prospect for higher taxes, U.S. debt ceiling uncertainty, and upcoming tapering by the Federal Reserve elevated risk. With these events considered, our outlook continues to expect the global recovery to continue. In September we maintained our twelve-month forward forecast of Growth (U.S. GDP […]
At the start of the year, inflation was widely expected to pick up as the base effects of a collapse in energy prices in the spring of 2020 began to show up in year-on-year inflation readings. The magnitude of the increase now appears to extend beyond those effects due to the ongoing rise in commodity […]
The COVID-19 pandemic appears to be less dramatic and lethal than some historic plagues and vaccinations will limit impact. Unfortunately, after substantial progress, the world faces a new enemy in the Delta variant. This highly contagious form of the virus devastated the subcontinent in spring and has now spread to almost 100 countries including the […]
Section 1: Q3 2021 Outlook Despite the robust underlying strength in the global economy, COVID remains a threat. With the Delta variant spreading more easily, it now looks likely that global infections this quarter will push well above the second-wave peak. The recent surge in infections in high vaccination rate countries is a surprise. […]
The macroeconomic environment was a key focus in May. Massive fiscal support has been the glue that has held the economy together but the re-opening contribution to growth is for the most part completed. The question of whether the change in consumer prices is transitory or a regime shift will determine the sustainability of economic […]
Economic activity has accelerated and is expected to remain strong into the third quarter of 2021, largely due to vaccination progress, economic re-opening, and large-scale fiscal stimulus. The U.S. is expected to be the principal driver of growth, followed closely by Europe as April restrictions are eased. While the demand side of the global economy […]
The tug-of-war between the virus and the global immunization effort intensified in March. The focus now will be on economic reopening. Every recession is different and the events that led to the great recession of 2020 were unique, as has been the response from governments and central banks. Through large-scale fiscal transfers and central bank […]