The Macro Report | November 2018

The Fed’s interest-rate gamble

Global economic growth remains vulnerable in the face of escalating trade tensions, higher interest rates, and volatility among emerging markets. But there are no early signs of a recession. While the nine-year U.S. economic expansion is poised to continue through the end of 2018, growth is likely to slow in 2019 as the stimulus from the tax cuts wanes. The Federal Reserve may be tightening monetary policy too much and too quickly, and further increases in interest rates may adversely impact the economy. President Donald Trump has criticized Fed Chairman Jerome Powell for the hikes and blamed an “out of control” central bank for the worst stock market sell-off since November 2008. The key question is if a policy mistake is unfolding.

In China, an escalating trade war with the United States, slowing growth and rising debt are weighing on the economy. The currency has weakened and is hovering near a 10-year low against the dollar. There is risk the U.S. administration may overtighten the screws on Beijing, raising the specter of a sharper Chinese downturn. Meanwhile, in Brazil, Jair Bolsonaro won the presidency in a runoff vote in October, signaling a shift to the far right. He inherits an economy hobbled by low growth and high debt.

Risk of Fed policy mistake grows

Risk of Fed policy mistake grows

U.S. Federal Reserve officials are worrying about inflation and have signaled more rate hikes at the risk of reversing the nine-year economic expansion.

More »

Populism wins in Brazil

Populism wins in Brazil

Jair Bolsonaro won the presidency in a runoff vote in October, signaling a shift to the far right. He inherits an economy hobbled by low growth and high debt.

More »

China’s economy looks shaky

China’s economy looks shaky

The economy is cooling, and policy makers are taking steps to calm jittery global markets as the trade war with the United States escalates.

More »

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