January Global Macro Monthly & Investment Strategy - The Vs to shape recovery – Vaccine Vs Virus
- The balance of restrictions and virus spread has been disrupted by more contagious new virus variants.
- 2021 started with increasing virus cases in several areas, and extensions to restrictions in depth or time. We have revised our Q1 GDP forecasts lower.
- Yet vaccinations are underway. Although herd immunity will take many months, restrictions should be relaxing by the spring. This should deliver a strong growth rebound.
- Fiscal supports have been extended – or are underway. Monetary support remains, although fiscal stimulus in the US has questioned the persistence of such support.
- Fed Chair Powell has dismissed taper talk for now. We consider the balance of inflation and rate expectations a key difference between now and the 2013 taper tantrum