BlackRock has released its Global Macro Outlook for 2017. It believes that consensus views are still too cautious.
“We are seeing signs of the global expansion becoming more synchronised and thereby self-reinforcing. This is consistent with our view that the US-led reflationary phase has further to run. Highlights in our special, expanded Macro Outlook to start the new year include:
- Reflation has arrived. US wage gains are feeding higher inflation and solid consumer spending, supporting profits in the face of rising labour costs.
- This has been far from a typical recovery: Healing the post-crisis economic wounds has meant US businesses and consumers took longer to regain confidence and animal spirits. These now seem to be revving up.
- Tightly integrated financial markets and global structural forces, including high world debt levels, should anchor US yields.
- We see risks. US president-elect Donald Trump has raised hopes on looser fiscal stimulus, but the make-up of any changes is key.”