In January 2021, we made a series of projections about trends that would characterize 2021 and the recovery from the COVID-19 pandemic. Since then, some countries have rolled out widespread COVID-19-vaccination efforts; in others, there have been reverses. Circumstances have changed.
Thanks largely to rising consumer spending and trillions in government stimulus, U.S. gross domestic product rose an annualized 6.4% in the first three months of the year, and total U.S. economic output could return to pre-pandemic levels by the end of 2021, years ahead of earlier expectations.
Second quarter is likely the peak growth rate for both the economy and corporate earnings; with positive economic surprises waning.
While it’s very early to say the rise in inflation has passed, there are signs that the fastest part of the rebound in inflation might soon be over.
Will we experience transitory (temporary) inflation or will it be non-transitory — more permanent?
With commodity prices soaring, money supply growth exploding, and government spending surging, there is a palpable fear of a return to 1970s-style inflation.
The global vaccination effort is resulting in the daily administration of millions of COVID-19 vaccine doses and a decline in virus cases. Though progress is likely to move in fits and starts, we expect a boost to global activity as nations increase the pace of inoculations, reduce virus-related social distancing measures, and move to reopen their economies.
Economic growth is picking up as the vaccine rollout gains speed, commodity prices are heading higher, the government is proposing another large fiscal aid package, and the Federal Reserve is pledging to keep its very easy monetary policy intact for the foreseeable future. Not surprisingly, inflation expectations are rising. Given these factors, how concerned should investors be about inflation? Here’s our take on the current situation, and what investors can consider doing now.
The COVID-19 pandemic has accelerated key global trends, most notably the adoption of digital technologies and the expanding role of government in the economy. Our top trends for 2021 look at how these themes are likely to evolve, reshaping prospects for inflation, easy money, the dollar and emerging markets, and recasting the profile of global market winners and losers.
Here are five themes William Blair expects will gain the attention of investors in the decade to come.