What to Expect in 2021

“Our best view is that the effect on inflation will be neither particularly large nor persistent.” And if it does pick up in a more concerning way, “we have the tools to deal with that.”
- Federal Reserve chair, Jerome Powell on Tuesday


Over the past several weeks, a sharp spike in bond yields has created volatility in equity markets. In particular, the Nasdaq and many tech companies have come under scrutiny as investors have reconsidered their exposure to these historically expensive securities. Inflation has also been a red-hot topic as new stimulus gets distributed and further stimulus is being discussed in Washington. Despite recently passing a $1.9 trillion spending package to combat the economic impact of the coronavirus, hot on the heels of $900 billion in stimulus passed in December, the Biden administration is eying an additional $3 trillion infrastructure package. This has led to inflation fears among some investors and lawmakers, even as Fed-head Jerome Powell downplayed concerns during his Tuesday testimony to the House Financial Services committee.

Last month, Felix Zulauf and Jeffrey Gundlach sat down with guest moderator Charles Payne to discuss rising bond yields, inflation, and other pertinent topics. For those who are unfamiliar with these names, Felix Zulauf is the owner and president of Zulauf Asset Management, a Switzerland-based hedge fund, and a former long-time member of the prestigious Barron’s Roundtable.  Jeffrey Gundlach, who was dubbed the “King of Bonds” in a February 2011 Barron’s cover story, is an American investor and founder of $85 billion asset manager DoubleLine.  Since we expect these topics to be front-and-center for investors in 2021, we decided to change up our typical long-form newsletter this week, and instead share fascinating perspectives on inflation, bond yields, the US dollar, and the global economy from two very highly respected investors. Please enjoy.

What to Expect in 2021

DISCLOSURE: This material has been prepared or is distributed solely for informational purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Any opinions, recommendations, and assumptions included in this presentation are based upon current market conditions, reflect our judgment as of the date of this presentation, and are subject to change. Past performance is no guarantee of future results. All investments involve risk including the loss of principal. All material presented is compiled from sources believed to be reliable, but accuracy cannot be guaranteed and Evergreen makes no representation as to its accuracy or completeness. Securities highlighted or discussed in this communication are mentioned for illustrative purposes only and are not a recommendation for these securities. Evergreen actively manages client portfolios and securities discussed in this communication may or may not be held in such portfolios at any given time.

  • Categories