The Macro Report | February 2017

Global divergences

Since the U.S. election in November, markets have warmed to the story of fiscal stimulus. But since the inauguration of President Trump, stimulative measures like tax reform and infrastructure spending have taken a back seat to what we would describe as less encouraging protectionist steps. The broad market rally has generally seemed impervious to policy uncertainty. But in time, we think markets may take a more sustained pause to reassess the risks.

While we wait to see whether growth-enhancing policy will emerge, we note this month that some weakness has crept back into U.S. consumption data. Also, we explore how a growth-enhancing policy agenda staked on corporate tax reform might impact the economy. Last, we turn to Europe, where we find pockets of strength despite higher political risk.

Headwinds to U.S. consumption

Headwinds to U.S. consumption

Weakness has crept back into U.S. consumption data, while labor markets continue to harbor some wage-related mysteries.

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The timing of fiscal change

The timing of fiscal change

Corporate tax cuts may provide a boost to the U.S. economy, but not as big a boost as other types of stimulus.

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The political brake on EU growth

The political brake on EU growth

Europe’s economy looks modestly stronger, but the continuing wave of populist politics threatens to slow things down.

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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