Economic Recovery and Growth
In 2021, the global economy continued to recover from the COVID-19 pandemic. Many countries rolled out fiscal stimulus and vaccination campaigns, which supported a rebound in consumer spending and business activity. Supply chain disruptions and rising commodity prices created headwinds, but GDP growth accelerated in several major economies compared with the prior year.
Inflation and Monetary Policy
Inflation rose notably during 2021 in many regions, driven by supply bottlenecks, energy price increases, and strong demand. Central banks, including the U.S. Federal Reserve, began adjusting policy stances, signaling future interest rate changes. For more details, see the Federal Reserve's monetary policy overview at https://www.federalreserve.gov/monetarypolicy/fomc_monetarypolicyreport2021.htm.
Key Financial Market Themes
Financial markets in 2021 saw strong equity rallies in tech and growth stocks, while bond yields moved higher amid inflation expectations. Commodities such as oil and metals gained, and foreign exchange markets reflected shifting economic outlooks. Investors focused on earnings recovery, interest rate expectations, and ongoing pandemic-related risks.
