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2021 Mid-Year Macro-Economic Forecast


The Anfield Investment Committee just completed its mid-year review of the firm’s macro-economic forecast. The team revisited factors such as Fed Policy, Inflation, US GDP, and US Unemployment, amongst others. Broadly speaking, we now see a world where the major central banks (US, UK, Europe) are stable and monitoring for potential rate increases in the years to come, while there are central banks in some less developed economies have been taking action to either spur growth or reign in their economies. Also, the summertime has seen robust economic growth as the population continues to become vaccinated and life returns to a more normal status. This view remains generally constructive for risk assets, in particular stocks. We still view debt markets as strained and will remain so for the foreseeable future. Further, perhaps highest on the list of risks - at least according to the pundits - is inflation. We believe some inflation is actually good, but are the current price increases we are experiencing now just a blip or is this a time of sustained increases for a longer period followed by normalization? While we would need to see more data for a conclusion, this is something that will be high on our radar. Additionally, we see employment and wage growth within the US as something that will play a large role in the back half of 2021, as unemployment benefits expire. Will those who have been out of work try and go back to their former industries? Or perhaps people will be exploring new opportunities? As with most of the larger macro-focused questions on the market’s mind, only time and data will tell.



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