Research & Investment Strategy

January Global Macro Monthly & Investment Strategy - The Vs to shape recovery – Vaccine Vs Virus

Key points

  • 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

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