The Macro Report | May 2017

New configurations

Global economic conditions have remained favorable, even if they deteriorated slightly in April — as our Global GDP Nowcast shows. Meanwhile, geopolitical tensions appear to have grown, particularly on the Korean peninsula, offering an early and fraught test to the young and embattled White House administration. In terms of monetary policy, we suspect the Fed is closer than we thought just a few weeks ago to agreeing on important balance sheet changes that could begin as early as this year.

In this context, Europe has been a standout — both for its positive economic surprises and the resilience of its political institutions. In addition, China’s interests in North Korea have gained a more public articulation thanks to President Trump’s unpredictability. And as the Fed contemplates different forms of tightening, we continue to expect some White House-led stimulus will eventually emerge, all of which should set up some interesting dynamics for policy and global risks in 2018.

Onward and upward in Europe

Onward and upward in Europe

As political risks diminish in Europe, economic strength continues to grow — which raises the pressure on ECB President Mario Draghi to bring an end to quantitative easing.

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Containing North Korea

Containing North Korea

With tensions rising between the United States and North Korea, China may play a critical role in defusing any potential conflict.

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A confident Fed

A confident Fed

U.S. economic strength may help the Fed make the case for taking two steps forward on the policy-tightening path.

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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