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.

With a narrowly Democratic Congress, U.S. fiscal spending is likely to increase on economic relief from the pandemic, infrastructure, and healthcare, boosting the economic rebound.

Is the 60/40 stock-bond portfolio dead? We don’t think so.

The Federal Reserve signals that monetary policy accommodation will remain firmly in place.

As European inflation and growth remain subdued, the European Central Bank expanded its monetary support. The central bank, however, is now focusing more on the region’s financing, rather than financial, conditions.

Debt of many emerging market countries can offer robust yields and enhance portfolio diversification, provided the asset manager has the resources and sophistication to avoid potential pitfalls.

The COVID shock has amplified disruptive trends, but we see global investment opportunities in the volatility ahead.

Policy will continue to be carefully calibrated as China walks a tightrope between supporting growth and maintaining financial stability.

We believe the Fed’s mortgage purchase program is helping to bolster economic activity, and accomplishing more than Treasury purchases alone.

Strong money growth in Europe has raised concerns about inflation taking off. We have a different view.

The lack of market reaction suggests that many investors are not convinced that the Fed’s new guidance represents any material shift in policy.

Fed officials seek higher inflation but need help from fiscal policymakers.

Rising prices in July have led PIMCO to raise its core inflation forecast for 2020, but not 2021.

The Federal Reserve wants financial conditions to remain accommodative as it looks to support the U.S. recovery.

European measures applied to mitigate the effects of the pandemic have contained the unemployment rate in Europe more than in the U.S. While recognizing economic risks from the rising number of COVID-19 cases in the U.S., our forecast sees this success ratio reversing before the end of the year.

We expect more stimulus, both monetary and fiscal, will be necessary to support the recovery amid the renewed COVID-19 outbreak.