Blog Charting Unusual Late‑Cycle Fiscal Stimulus in the U.S. How can investors navigate volatility arising from late-cycle fiscal stimulus?
With unemployment already low at around 4%, the U.S. shift toward fiscal expansion late in this economic cycle goes against what we’ve seen for much of the past 70 years.As the chart shows, the government has typically spent countercyclically during economic declines to boost hiring and cut unemployment. Today’s fiscal stimulus paired with limited slack in labor markets could spur volatility, given higher risks to both the upside (faster GDP growth) and the downside (rising inflation and reduced “firepower” for policymakers in the next downturn).To navigate these uncertainties, we think investors should focus on strategies offering diversification and the flexibility to respond to changing conditions, potentially moving away from more benchmark-constrained strategies.For a further discussion of what late-cycle fiscal stimulus means for investors, see our Quick Takes video, “Is Volatility Here to Stay?”Watch Now
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Viewpoints Social at the Center of ESG As we actively engage with bond issuers through this pandemic-driven economic crisis, we see five major social themes affecting creditworthiness and driving new social bond issuance.
Featured Solutions Today’s Credit Opportunities in 5 Charts The protracted low-yield environment has left many investors with insufficient returns to meet their goals: how can credit help? Here we highlight where we see 5 credit opportunities.
Asset Allocation Takeaways: Building Resiliency Amid Uncertainty In this abridged version of our July 2020 Asset Allocation Outlook, we discuss how we are positioning multi-asset allocation portfolios in light of our outlook for the global economy.
Asset Allocation Outlook Building Resiliency Amid Uncertainty We are focused on positioning multi-asset allocation portfolios to withstand a wide range of potential economic outcomes, and we see select opportunities for active investors.
Equities vs. Bonds? Look to China for Clues Chinese stimulus could be instrumental in deciding which investors are proved right.
Viewpoints A Phased Market Recovery as Liquidity and Fundamentals Return The COVID-19 pandemic pummeled financial markets, but liquidity and fundamentals are coming back.
