The Macro Report | December 2018

The U.S. economy’s slow fizzle

There are signs of weakness in major U.S. economic indicators, including home building and investments, raising concerns that one of the longest periods of economic growth in U.S. history may be coming to an end. These signs also indicate the United States has joined the global economic deceleration amid rising interest rates and tumbling stock markets. In addition, the Fed raised its benchmark interest rate four times as of the end of December 2018, and projects at least two hikes in 2019.

In Europe, France and Spain are grappling with political stresses as Italy’s economy shrinks and the European Central Bank weighs monetary policy. Political uncertainties keep bubbling up, reflecting popular dissatisfaction with the status quo. The eurozone’s reform agenda and economic growth continue to struggle against the difficult backdrop. Adding to the global malaise are falling oil prices. Weakness in oil prices forced OPEC and its allies to try to stabilize the market with production cuts as the United States reimposed economic sanctions on Iran.

U.S. growth poised to cool

U.S. growth poised to cool

There are indications the economy is losing momentum, including a weaker housing market and lowing corporate investment.

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Europe’s political divide

Europe’s political divide

Opposition to productivity reforms and budget compromises compound debt issues as the European Central Bank weighs monetary policy.

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OPEC, Iran, and oil prices

OPEC, Iran, and oil prices

Weakness in oil prices forced OPEC and its allies to try to stabilize the market with production cuts as the United States reimposed economic sanctions on Iran.

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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