First quarter 2021 Global Outlook

Western Asset: Our base case outlook is for a U-shaped global economic recovery. Here, we provide a summary of the key drivers behind our global outlook and describe where we see value across global fixed-income markets.


    • We expect central banks to remain extraordinarily accommodative, especially given ongoing subdued inflation pressures, a recognition that global growth remains fragile and the persistence of downside risks.
    • In the US, growth has slowed from the spectacular pace of 2020, but that is only to be expected as activity in most sectors re-approach pre-COVID-19 levels and activity in other sectors continues to be restrained by sustained strictures on businesses and by consumer fears.
    • We expect Europe to rebound in 2021, albeit subject to large cross-country variation as a result of very different recovery potentials, different speeds of vaccine rollout, but also due to the discretionary deployment of fiscal policy.
    • In China, we expect the 2H20 economic rebound to extend over the next several years as the economy resumes its structural transition away from low-end manufacturing and investments toward consumption, services and the information technology sectors.

    Link: Solution to consider: Western Asset Core Plus Bond Fund


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