UOB Group’s Head of Research Suan Teck Kin, CFA, and Senior Economist Alvin Liew assess the US outlook. Key Quotes “The recent US Treasury yields surge was attributed to the vaccine-driven reflation expectations, US to “go big” on fiscal stimulus, and inflation fears that could lead to earlier than expected monetary policy tightening.” “Even though latest US inflation outcomes remained benign, they are lagging indicators and the crux of the issue is expectations of higher inflation have been building up, reflected in the jump in TIPS as well as consumer expectations.” “The key supporting factors to US inflation in 2021 include the acceleration in growth of personal consumption. capital spending, housing, and inventory builds of which these sectors had been the main contributors to the US’ recovery process last year. The US savings rate is expected to normalise as US consumers resume their social and travel activities and increase spending. If the consumer spending surge is formidable, then so will be the inflation risk. The key downside for prices is the significant slack in the labour market.” “We see US inflation rate to be trending higher, not yet at the “overheating” stage but the balance of risks is increasingly tilted to the upside. Our US 2021 growth forecast remains at 4.5% but risks are for even higher growth, potentially due to the upside on successful vaccine rollouts and more fiscal stimulus into the US economy. We now expect headline inflation forecast to average 1.7% in 2021 (from previous projection of 1.2%), with the risks also biased to the upside.” “Our end 2021 forecast for 10Y UST and SGS yields have both been revised higher from 1.20% to 1.65%, based on positive progress in COVID-19 vaccinations and the benign reaction by policy makers to the uplift in yields thus far.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next GBP/USD to remain below the 1.40 mark in case of new UK taxes FX Street 1 year UOB Group’s Head of Research Suan Teck Kin, CFA, and Senior Economist Alvin Liew assess the US outlook. Key Quotes “The recent US Treasury yields surge was attributed to the vaccine-driven reflation expectations, US to “go big” on fiscal stimulus, and inflation fears that could lead to earlier than expected monetary policy tightening.” “Even though latest US inflation outcomes remained benign, they are lagging indicators and the crux of the issue is expectations of higher inflation have been building up, reflected in the jump in TIPS as well as consumer expectations.” “The key supporting factors to US inflation in 2021… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.