Updated: Jan 25, 2021
Each year the Anfield investment team undertakes a comprehensive economic forecast for the following calendar year. The process begins with a 2-day gathering of Anfield staff (this year via Zoom!) and select expert colleagues from other firms. The results of that 2-day gathering were previously circulated in the form of 2021 global themes and wild cards. The second part of this annual process is the derivation of specific macro-economic forecasts outlined below. From here, Anfield will develop capital market expectations and then reformulate investment strategies designed to capture the opportunities we see, and importantly to avoid or limit areas of risk going forward. We expect the entire process to be completed by mid-January and will circulate and implement our findings as soon as possible.
To summarize our 2021 macro-economic forecast, the team evaluated factors such as Fed Policy, # of Rate Hikes, US GDP, US Unemployment, and ECB Policy, amongst others. Broadly speaking, we see a world where central banks continue to be on hold from a policy perspective and economic growth is considerably stronger than in 2020, gaining momentum in 1H21 but strongest in 2H21 as the population becomes more vaccinated and life starts to resemble “normal” once again. This view is generally constructive for risk assets, in particular stocks. At the same time, debt markets will likely be challenged during the year. Further, high on the list of risks include the potential for further USD weakening and inflation regaining traction.
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