Even as central banks hold in place, recovery amid currently easy monetary policy could bring renewed pricing pressures.

After a year of profound economic and market turbulence, we anticipate improving global growth in 2021. Accelerated vaccine distribution should allow for wider reopening, while the release of pent-up demand and ongoing monetary support will likely help drive renewed expansion. With asset prices close to record highs, however, we believe that many investors are underestimating the potential risk of inflation as economies recover. In this edition of our Outlook, we focus on inflation developments and how they could affect fixed income positioning in the year ahead.