The Quarterly: New Year Optimism Confronts the Pandemic

By Tanner Ehmke , Jeff Johnston , Dan Kowalski , Christina Pope and Teri Viswanath

January 14, 2021

2021 has quickly altered the political and market landscape. And optimism, particularly about the second half of the year, is rising. But to get there, all of us must muddle through for a few months more.

For now, the pandemic is still very much impacting the U.S. economy and rural industries. But the dissemination of vaccines and dramatic improvement in commodity prices is enabling markets to look over the horizon to better days ahead. The shakeup in political power in Washington has boosted confidence that more fiscal spending is on its way, steepening the yield curve and raising GDP forecasts.

Without question, there are difficult months still ahead. COVID cases are still surging and the events of January 6 have rattled the country, raising the question as to whether more violence will erupt. But the second half of the year looks increasingly positive if vaccine uptake advances as hoped.