The Macro Report

Timely macroeconomic insights on the global economy, fixed-income markets, currencies, and policies.

Markets see living with Covid-19 as the new normal

Markets see living with Covid-19 as the new normal

August 17, 2021

Global financial markets might be pricing in a “living with the virus” environment and are adjusting to a lower growth path.

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U.S. labor market — 55 is the new 65

U.S. labor market — 55 is the new 65

Following broad-based recovery in the labor market when the economy initially reopened in 2020, the labor force participation rate has stagnated and started to diverge.

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Pandemic takes toll on emerging market finances

Pandemic takes toll on emerging market finances

New mobility restrictions will be a drag on emerging economies, but we expect the impact will be less severe than during the first wave of the pandemic.

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U.K. rebounds as consumers splurge, factories rev up

U.K. rebounds as consumers splurge, factories rev up

The U.K. economy is recovering as retail sales, manufacturing, and services show strong growth, driven by the easing of lockdown rules.

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Toys, cars, and the U.S. recovery

Toys, cars, and the U.S. recovery

We believe growth in the United States remains strong, but expectations need to be revised lower.

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Oil makes a comeback as demand rises

Oil makes a comeback as demand rises

Oil demand is likely to rise amid a stronger outlook for the United States, China, and Europe.

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Fiscal impetus and the U.S. labor market

Fiscal impetus and the U.S. labor market

We examine the interplay between President Biden's multi-trillion-dollar stimulus plans, the labor market, and corporate profits.

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China focuses on growth today and on tech for the future

China focuses on growth today and on tech for the future

China's ambitious five-year plan calls for self-sufficiency in technology and quality domestic growth.

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Economic recovery, European-style

Economic recovery, European-style

We believe Europe's economic activity can remain in expansion and perhaps even surprise on the upside in the second quarter.

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From V-shaped recovery to bond vigilantes

From V-shaped recovery to bond vigilantes

The Federal Reserve remains dovish on monetary policy as bond market vigilantes push yields higher.

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Green shoots in Japan's economy

Green shoots in Japan's economy

Japan's economy, the world's third largest, will likely accelerate in mid-2021 as vaccine rollouts gather steam.

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U.S. consumers flush with cash could drive temporary inflation

U.S. consumers flush with cash could drive temporary inflation

An easing pandemic and rising consumption will buoy U.S. growth, and potentially inflation.

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Rising yields and mixed recoveries in emerging markets

Rising yields and mixed recoveries in emerging markets

The broad outlook for emerging markets has improved as vaccinations gather pace, but higher global interest rates will create headwinds.

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Oil prices rally as supply dwindles

Oil prices rally as supply dwindles

OPEC+ will be the key determinant for near-term oil prices as the outlook for global demand improves.

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Global economic recovery hinges on vaccine success

Global economic recovery hinges on vaccine success

Vaccine supply and efficacy rates will be important factors for a return to pre-pandemic global activity.

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Is inflation poised to return?

Is inflation poised to return?

We believe that pandemic-related bottlenecks have temporarily lifted U.S. inflation. Still, the underlying inflation trend is weak.

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China's economy pulls ahead

China's economy pulls ahead

China’s economy is rebounding and the virus spread remains mostly under control.

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U.K. starts new chapter after EU split

U.K. starts new chapter after EU split

It is strategic for the U.K. to have a trade deal with the EU given the short- and long-term negative effects of Brexit.

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Vaccine-led recovery could boost emerging markets

Vaccine-led recovery could boost emerging markets

The pace of economic recovery will differ among emerging markets, depending on COVID-19 vaccines and virus trends

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Vaccine not in time for jobs recovery

Vaccine not in time for jobs recovery

The U.S. labor market continues to lose steam as fewer Americans were able to find work amid surging Covid-19 cases.

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Oil markets pin hope on vaccine and OPEC+

Oil markets pin hope on vaccine and OPEC+

Oil prices are likely to trend slightly higher as OPEC+ mulls maintaining lower output in 2021 and demand recovers in key markets such as China.

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Calls for new stimulus as recovery fizzles

Calls for new stimulus as recovery fizzles

Governments are trying to calibrate their policies to support growth as “fiscal cliffs” loom amid a resurgence in the virus.

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U.S. politics amid virus surge

U.S. politics amid virus surge

U.S. election politics are playing out against a backdrop of an easing recovery, rising COVID-19 cases, and a potential new vaccine.

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China leads, other emerging markets lag

China leads, other emerging markets lag

China is leading the economic recovery among emerging-market countries, buoyed by stimulus and stringent COVID-19 measures.

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Pandemic persists in policy patchwork

Pandemic persists in policy patchwork

Fiscal and monetary policies will be central to the economic recovery between now and the availability of a COVID-19 vaccine.

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U.S. economy remains a centerpiece in 2020 vote

U.S. economy remains a centerpiece in 2020 vote

Fiscal policy will be a key focus for investors after the November election.

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The global economy and the race for a vaccine

The global economy and the race for a vaccine

The development of a vaccine will play a role in shaping the global economic comeback in 2021.

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Keeping Japan's economy afloat after Abe

Keeping Japan's economy afloat after Abe

Prime Minister Shinzo Abe's resignation raises questions about the future of Abenomics and reform in Japan.

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The Fed’s flexible new policy

The Fed’s flexible new policy

The Fed announced a shift in its approach to monetary policy and the new strategy can be viewed as a flexible form of average inflation targeting.

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V-shaped recovery proving elusive

V-shaped recovery proving elusive

The U.S. and global economic recoveries are unlikely to be “V-shaped” as businesses and consumers remain wary of returning to pre-pandemic behavior.

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Vaccine is a wild card for the economy

Vaccine is a wild card for the economy

A vaccine for the coronavirus will be supportive of risky assets even if the economic benefits take longer to materialize.

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Risk sentiment swings with Fed tapering

Risk sentiment swings with Fed tapering

Without a proactive Fed, the rally in risk assets would be in trouble.

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Europe displays rare unity over relief fund

Europe displays rare unity over relief fund

In a step toward closer ties, European Union leaders plan to discuss a recovery fund for countries hardest hit by the pandemic.

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U.S.–China war of words playbook

U.S.–China war of words playbook

The politics of the U.S.–China relationship have clearly become more complicated recently. The war of words over China’s handling of the coronavirus outbreak and the proposed new Hong Kong security law has the potential to create headwinds for the global economy and financial markets.

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U.S. economic fog lifts slightly

U.S. economic fog lifts slightly

It is encouraging that some stabilization has started in the United States and the economic data fog is lifting just a little; but we forecast a low probability of a "V-shaped" recovery.

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Coronavirus tests limits of U.S. stimulus plans

Coronavirus tests limits of U.S. stimulus plans

The pandemic is testing the policy responses from the Federal Reserve and Congress to boost the U.S. economy and calm financial markets.

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Stumbling toward a fiscal equilibrium in the eurozone

Stumbling toward a fiscal equilibrium in the eurozone

The economic impact of the coronavirus pandemic in Europe will be severe amid efforts by policymakers, including the ECB, to cushion the blow.

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Bracing for a slow U.S. recovery

Bracing for a slow U.S. recovery

U.S. economic recovery will likely be slow and halting as coronavirus health risks cast a shadow on demand.

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Oil’s wild ride and what lies ahead

Oil’s wild ride and what lies ahead

Demand for oil has collapsed as the coronavirus pandemic devastates the global economy and curbs much of the need for fuel from companies and consumers.

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Navigating bond yields

Navigating bond yields

The trajectory of bonds yields will depend on the Federal Reserve's policies and fiscal stimulus amid a sharp global economic downturn.

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Social distancing generates recession

Social distancing generates recession

A recession is looming in the U.S. as COVID-19 and social distancing take a toll on economic activity.

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Manager insights: Bulls, bears, and bond markets

Manager insights: Bulls, bears, and bond markets

With the extreme swings in the market over the past few weeks, several of Putnam’s senior fixed-income managers shared their insights on the bond markets

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Slowing the spread of Covid-19 entails economic disruption

Slowing the spread of Covid-19 entails economic disruption

The global economic outlook has deteriorated because of the coronavirus pandemic and rising supply and demand disruptions.

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The Fed reacts to coronavirus economic risks

The Fed reacts to coronavirus economic risks

The Fed made a proactive move to reduce the federal funds rate by 50 basis points.

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The impact of coronavirus on markets

The impact of coronavirus on markets

The spread of coronavirus infections is having an impact on China’s GDP and on financial market sentiment worldwide.

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Is another round of Fed rate cuts looming?

Is another round of Fed rate cuts looming?

The Federal Reserve may lower its benchmark interest rate by 50 basis points in 2020 if sustained financial market stress affects economic activity.

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China's economy braces for fallout from coronavirus

China's economy braces for fallout from coronavirus

There will be some temporary disruption to economic activity in China and elsewhere from the coronavirus outbreak.

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Bond yields in early 2020 likely to stay range bound

Bond yields in early 2020 likely to stay range bound

Bond yields will likely stay range bound in early 2020 as the economy shifts to a lower gear and central banks shift to neutral.

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Will the improving housing market further divide the Fed?

Will the improving housing market further divide the Fed?

The Fed remains divided on the trajectory of interest rates; a pick up in U.S. housing activity may increase this division.

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An inverted yield curve: Recession or stagnation?

An inverted yield curve: Recession or stagnation?

The Treasury yield curve briefly inverted in August, rattling markets with the possibility of a recession.

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July rate cut: “Insurance” policy or recession guard?

July rate cut: “Insurance” policy or recession guard?

The Fed cut interest rates to protect growth from downside risks and described the move as a mid-cycle adjustment to policy, or a so-called “insurance” cut.

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Trade war fallout can hurt risky assets

Trade war fallout can hurt risky assets

The simmering trade war between the United States and China is expected to continue, and could put the economy at risk.

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Trade tensions could reduce global GDP

Trade tensions could reduce global GDP

There is a significant likelihood that U.S.-China trade tensions will remain high. Effects on global GDP effects are uncertain, but could exceed 1%.

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The U.S. takes the policy road less traveled

The U.S. takes the policy road less traveled

The difference between U.S. and European economic growth trajectories may come down to policy paths taken or not taken.

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Warming economy may leave bond index cold

Warming economy may leave bond index cold

It appears likely that the U.S. economy will continue to improve, keeping interest rates elevated and volatile. The U.S. recovery, despite ...

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New home sales shine in U.S. recovery

New home sales shine in U.S. recovery

Based on its internal dynamics, the U.S. economy continues to be one of the most attractive for investors. One of ...

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Mixed data may hint at economic slowdown

Mixed data may hint at economic slowdown

While the U.S. economy merits a degree of optimism, as the recovering housing sector has supported improvement in the labor ...

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Putnam Global GDP Nowcast
Global economic growth slows
3.95%
Putnam Global Risk Appetite Index
Risk appetite remains positive

Risk

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 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