Tactical Investment Strategy, April 2021

April 23, 2021 — The second quarter brings a rosy economic picture, with double-digit GDP growth expected as reopening activity meets swelling consumer wallets. The primary risk to the outlook is an overheating scenario that drives up inflation quickly and prompts fears that the Fed will need to rush a more compressed taper/hiking timeline. We see this as unlikely and remain tilted toward an upside scenario, but we have lowered risk modestly given valuations and strong returns.