WEBVTT

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We think that the stars are
aligned for the strongest year

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of economic growth since 1984.

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There are three tailwinds

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that we believe should keep
economic growth unusually strong

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through the first half of 2022:
First, massive fiscal stimulus

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from President Biden's last
three budget proposals; second,

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huge excess savings accumulated
during the pandemic; and third,

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accelerated vaccine deployment
that is containing the spread

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of the coronavirus in the
U.S. All that good news

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at the moment is creating
some investor anxiety

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about what it means
for inflation.

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Price pressures already
are building, and we think

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that more is on the way.

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We're expecting supply-chain
disruptions

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and rising transportation costs
to keep "goods," or merchandise,

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inflation at an eight-year high.

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We're also looking for
services inflation to rebound

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from a 10-year low, propelled
by unusually strong growth

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from last year's freefall and
by wage pressures lifting costs

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in the labor-intensive
services sector.

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The big question is
whether or not fear

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of rising inflation
becomes self-perpetuating.

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Our opinion is that
moderating growth,

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low inflation expectations
and, most importantly,

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structural restraints like
increased competition here

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and abroad will hold
inflation in check beyond 2022.