The global economy is poised for a strong recovery. Inflation is likely to spike temporarily, but we forecast that much of this rise will reverse later this year.

Democrats could begin working on a tax bill later this year, but resulting tax hikes may be weaker and less of a headwind to growth than some fear.

The expiration of the temporary SLR changes should enhance the soundness of the banking system, but likely at the cost of Treasury market liquidity.

The Federal Reserve’s communications following its March meeting should help anchor inflation expectations.

The COVID-19 relief bill has spurred talk of inflation, but financial stability may be a more relevant risk.

Longer-dated Treasury yields have climbed as markets consider whether economic growth and inflation expectations might accelerate more rapidly. We believe inflation pressures will remain in check and bond yields will be range-bound.

A recent report showed an uptick in inflation in Europe, but markets are pricing in low inflation over the long term. We see opportunity for investors to hedge inflation risk.

China’s economy should see a soft landing as stimulus is reduced, but the drag on global growth may place a burden on developed economies to keep stimulus taps open for longer.

A large fiscal package geared toward pandemic relief will likely boost U.S. growth even further in 2021, but long-term inflationary risks are still balanced.

Despite seeing major market swings following the 2016 Brexit referendum, we don’t expect Britain’s departure from the European Union (EU) to have any major economic effects in our baseline outlook for 2021 and beyond. Far more important are COVID-19, fiscal policy, and bigger questions around future productivity growth.

A confluence of dynamics are set to accelerate global capital flows to emerging markets amid attractive valuations.

Global output and demand are likely to rebound strongly in 2021, but we see risks that call for careful portfolio positioning.