The Macro Report | March 2019
Balancing growth and interest rates
The global economy continues to slow. Higher interest rates, weaker demand from China, political troubles in the eurozone, and protectionist tariffs have kept the lid on economic growth. Still, that downward trend may be easing, and we are likely to see waves of optimism and pessimism about growth in the coming months. The Federal Reserve’s dovish pivot on interest rates has boosted markets and prompted investors to bet against further hikes. The Fed will also take a more flexible approach to shrinking its balance sheet.
Meanwhile, China continues to fine-tune measures to cushion its cooling economy. Amid this flow of supportive measures, we expect growth in the world’s second-largest economy will stabilize. China and the United States are also close to a trade deal, and any truce would be a positive step. In Venezuela, meanwhile, sanctions have essentially ended crude exports to the United States, causing fluctuations in global oil prices.
The Fed turns dovish
Low inflation and a moderate deceleration in economic growth may prompt the Fed to pause on future rate increases.
China’s growth playbook
The world’s second-biggest economy may be stabilizing as policy makers cushion some of the slowdown with more supportive measures.
About the macro report
The Macro Report is written by members of Putnam’s Fixed Income team. With backgrounds in applied economics, currency and interest-rate analysis, and sovereign and local bond market dynamics, this group conducts macroeconomic research in support of Putnam’s global fixed-income strategies.
Michael Atkin, Portfolio Manager
Investing since 1988
Sovereign debt, global growth analysis
Albert Chan, CFA, Portfolio Manager
Interest-rate derivatives, government debt, risk analysis
Onsel Emre, PhD, Analyst
Inflation, risk analysis, global growth dynamics
Sterling Horne, Analyst
Politics and economics
Irina Solyanik, CFA, Analyst
Quantitive analysis, growth forecasting
Izzet Yildiz, PhD, Analyst
Labor market analysis, global growth dynamics