In the US, inflation is becoming a prominent theme for financial markets with a growing suspicion that its rise could be larger and longer-lasting than the Federal Reserve is currently anticipating. The economic backdrop has improved and with vaccine roll-out gaining momentum we remain hopeful that Covid-19 containment measures will be eased more broadly during mid to late 2Q21. We anticipate significant pent up demand, fueled by a $2.4tn increase in household savings over the past year, once this occurs. The issue is that vigorous demand could come up against a supply-constrained service sector given significant ... (full story)