The Macro Report | March 2017

A braver new world

Will President Trump usher in a new era of faster economic growth? Will immigration restrictions deprive the United States of the labor it needs to grow more quickly? We have had these questions for a while, and we still don’t know enough to answer them. Our near-term conclusion is that nothing will happen early enough in this administration to have a meaningful impact on growth in 2017.

This month we take a closer look at the U.S. labor market, where we see some evidence of more slack despite the tightening trend. Also, while the collision of higher inflation with stagnant wages is a problem, we see some potential for oil price weakness this year that may take the edge off inflation. Last, we consider a few points on coming changes at the world’s major central banks that could make 2018 a brave new world indeed.

A closer look at labor

A closer look at labor

Although the U.S. labor market has moved closer to full employment, real income growth is near zero. What will this mean for economic growth?

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Oil in a time of shale

Oil in a time of shale

The days of $100 oil are not likely to come again soon. Given what we know about supply and demand, we view the $40–$50 range for a barrel of Brent crude to represent fair value.

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The liquidity shock of 2018

The liquidity shock of 2018

As the era of easy money gives way to more aggressive monetary policy, the real risk to the markets may be central bank balance sheet adjustments.

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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