The Macro Report | November 2019
Reading signs of stabilization
The global economy is likely to stabilize at around the current growth rate. U.S. growth settled in at a slower pace in the third quarter, with consumer spending helping lift the economy while manufacturing and business investment faltered. The Federal Reserve lowered the benchmark federal funds rate to a range between 1.5% and 1.75% in October, the third reduction since July, and hinted at a pause in its policy easing. The United States and China are in talks to finalize an initial — or phase one — trade deal, helping diffuse existing tensions. Against this backdrop, the likelihood of a recession remains low.
Elsewhere in the world, the United Kingdom is getting ready for snap elections in mid-December. The vote comes amid continued divisions within Britain over its membership in the European Union (EU) and Prime Minister Boris Johnson's exit plan. We expect a "soft Brexit" vision to prevail. In Japan, policy makers continue to grapple with slowing growth. The Bank of Japan (BoJ) plans to keep its policy rates at the current levels or reduce them so long as uncertainties remain about reaching the central bank's 2% inflation target.
Consumers prop up U.S. economy
The economy is on a gently slowing trend as spending by consumers continues to buoy growth and the Fed signals a pause in cutting rates.
The EU agreed to delay Brexit until the end of January 2020, setting the stage for elections and a showdown between the major parties.
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, Head of Macro & Sovereign Credit
Investing since 1988
Sovereign debt, global growth analysis
Albert Chan, CFA, Head of Portfolio Construction
Interest-rate derivatives, government debt, risk analysis
Onsel Gulbiten, 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