Inflation Normalisaton or Risk?

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Looking ahead at 2021, we expect nominal growth of around 6% in the US and 5% in Europe. The normalisation of the economy is, in our view, ongoing with significant potential given the high level of household savings rates (18% in the US, 24% in Europe) and available liquidity, the result of the expansion of central bank balance sheets. However, while this positive outlook suggest that the risk of recession has faded, the new concern is that the scale of the recovery could lead to unexpected inflation. We are not there yet, but our inflation indicators are showing signs of renewed vigour.


Inflation Normalisaton or Risk?
Source: Bloomberg, Unigestion. Data as at 14 December 2020.

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