Bridgewater lays out its 2021 outlook through the lens of shifting economic regimes, emphasizing how policy coordination between fiscal and monetary authorities is reshaping market dynamics. The paper suggests that liquidity and stimulus levels, now exceeding 20% of GDP in major economies, may continue to drive asset prices more than fundamentals.
Our 2021 Global Outlook
Bridgewater
Research
7 Pages
Key Takeaways
Policy Dominates Markets: Fiscal and monetary stimulus exceeded ~20% of GDP, significantly influencing asset prices and compressing traditional risk premia.
Inflation Regime Shift: Inflation expectations rose toward ~2–3%, increasing the probability of a sustained shift after a decade of disinflation.
Asset Return Dispersion: Cross asset return dispersion increased by ~30%, creating more opportunities for active positioning across geographies and asset classes.
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