The Macro Report | January 2017

Real rhetorical deals

As of mid-January 2017, the markets are taking an optimistic view of what the new Republican control of Washington will bring. Looking back, December 2016 looks like a classic “risk-on” move, with global equities performing well and long Treasuries performing poorly. While the future of U.S. policy remains largely opaque and, for now, purely rhetorical, we know what signals to watch for in the coming weeks.

This month we examine three dimensions of risk emanating from Washington D.C., and provide a roundup of key considerations for central banks in the United States, Europe, and Japan. Lastly, we continue our examination of China — focusing this month on how Chinese authorities are grappling with their currency problems. For 2017, the China puzzle remains, but the biggest uncertainty concerns the U.S. growth path under the deal-making aspirations of Trumponomics.

Three dimensions of U.S. economic risk

Three dimensions of U.S. economic risk

Under President Trump, fiscal policy, trade policy, and regulation are significant sources of risk.

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Central banks at the crossroads

Central banks at the crossroads

Reading signs of inflation, developed-world central banks are considering their options for tightening monetary policy.

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China on the FX tightrope

China on the FX tightrope

Despite geopolitical pressures, China continues to deploy numerous tools to manage a steady decline in its currency.

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About the macro report

The Macro Report is written by members of Putnam’s Fixed Income team. With backgrounds in applied economics, currency and interest-rate analysis, and sovereign and local bond market dynamics, this group conducts macroeconomic research in support of Putnam’s global fixed-income strategies.

Michael Atkin, Portfolio Manager
Investing since 1988
Sovereign debt, global growth analysis

Albert Chan, CFA, Portfolio Manager
Interest-rate derivatives, government debt, risk analysis

Onsel Emre, PhD, Analyst
Inflation, risk analysis, global growth dynamics

Sterling Horne, Analyst
Politics and economics

Irina Solyanik, CFA, Analyst
Quantitive analysis, growth forecasting

Izzet Yildiz, PhD, Analyst
Labor market analysis, global growth dynamics