FROM THE GLOBAL ASSET ALLOCATION TEAM
- By Candice Bangsund, Vice President and Portfolio Manager, Global Asset Allocation
The macroeconomic outlook continued to gather momentum heading into the second quarter as the global vaccine campaign accelerated, while plans for large-scale fiscal spending in the US also emboldened calls for a rapid recovery through 2021. Investors cheered President Biden’s ambitious multi-trillion dollar infrastructure proposal (the American Jobs Plan) that added to the stronger growth narrative, which when combined with the Federal Reserve’s dovish forward guidance has stoked fears of runaway inflation. However, while indeed acknowledging this upbeat trajectory for growth, the Federal Reserve stayed the course and emphasized that a full recovery is a long ways off, citing lingering and persistent labour market slack as grounds for a highly-accommodative monetary policy stance.