Returns and yields: please don’t stop the music


Returns and yields: please don’t stop the music

Another year, another Fed-propelled rally. A review of NEAM’s 2020 fixed income return forecast and our return outlook for 2021, by Vincent DeLucia of NEAM.

2020 proved to be “one of those years”. A global pandemic wreaked havoc around the world and left many lives and livelihoods in its wake. Historic fiscal and monetary policy measures were taken to keep a very dire situation from completely upending the global economy.

In the aggregate, the policies were effective and the economic damage was reasonably well contained, despite the massive disruption and heartache caused by COVID-19.

As what has now become the customary response whenever there is some sort of crisis, in 2020 the Federal Reserve, European Central Bank (ECB) and central banks across the globe flooded the financial system with liquidity so that in an awful year for both people and corporate profits, the S&P 500 returned nearly 18 percent.

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