Our baseline view is for a strong recovery across the world and inflation that - in spite of all the reflationary talk - is likely to remain below central bank targets over the next one to two years, notwithstanding a temporary spike over the next several months.
In our spring 2021 Cyclical Outlook, we discuss what our outlook for global growth, inflation, and central bank policy will likely mean for markets and investors over the next year. This blog post is a distillation of our views.
Global growth looks set to rebound even more strongly in 2021 than we'd anticipated in our January Cyclical Outlook. Governments have stepped up fiscal support significantly, and the accelerating vaccine rollout should permit a ramping up of economic activity in COVID-constrained service sectors over the next couple of quarters.
However, this is a very different economic cycle, coming out of a recession driven by lockdowns and voluntary social distancing, rather than underlying economic and financial strains, and there is a higher-than-usual amount of uncertainty in the outlook.
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