lord byran For the coming year, Wien and Zidle expect the Fed and the Treasury will continue their accommodative policies to bolster the economy. Faster inflation, while still modest, is set to fuel gains in gold and boost the allure of cryptocurrencies, they say. The duo also project a reversal in the U.S. dollar’s decline as a strengthening economy and financial markets lure investors “disenchanted” with the rising debt and slower growth of Europe and Japan.
Wien says his surprise list is made up of events that investors assign 1-in-3 odds of happening but that he thinks are more than 50% likely. Below are his other calls for 2021:
- The Fed extends the duration of bond purchases in order to prevent higher rates at the long end of the curve
- Former President Donald Trump starts his own television network and plans his 2024 campaign
- Chinese shares to lead emerging markets as President Joe Biden begins to restore trade relationships with China
- Cyclical shares lead defensives, small-caps beat large-caps. Big-cap tech, likely the source of liquidity, will lag for the year
- The Justice Department softens its case against Google and Facebook, persuaded by the argument that the consumer actually benefits from the services provided by these companies
- The price of West Texas Intermediate oil rises to $65 a barrel amid a return to normal economic activity. Both energy bonds and stocks rally
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