What matters now is what the Fed does next, which could significantly affect the outlook for US inflation, and with Trump's next move...
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The Tabula monthly - November 2020
Vaccine news is leading to a relief rally, but the journey to managing the virus remains long and complicated
The incoming Biden administration is committed to further Covid-related stimulus, including more direct payments to households
What matters more is what the Fed does next, which could significantly affect the outlook for US inflation
With Trump's next move unclear, now is the time to prepare portfolios for year-end illiquidity
The outlook for US inflation
The Fed has committed to a new inflation regime, and the President-elect will likely be more supportive of accommodative monetary policy.
Combined with the demand/supply fallout from the Covid-crisis, the decade of low and stable inflation may be coming to an end.
Source: ASR Ltd, Tabula and Bloomberg as of 31 October 2020. Realised inflation is PCE change YoY. Implicit Fed target represents required inflation rate over the next five years to achieve Fed target of 2% inflation over 10 years.
To learn more about possible inflation scenarios view the replay of our recent webinar.
A simple but comprehensive solution to inflation exposure
1 Performance represents the iBoxx iTraxx Europe Bond Index. 2 Performance represents the Bloomberg Barclays US Enhanced Inflation Index. 3 Performance represents the CDX North American High Yield Credit Short Index. 4 Performance represents the iTraxx-CDX IG Global Credit Steepener Index.
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