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Sticking with reduced risk taking

Sticking with reduced risk taking

🕔16:45, 26.Sep 2022

BII Global weekly commentary The new regime of macro volatility is playing out with weaker growth, persistent inflation and volatile markets. We stick with our dialed-down risk stance. U.S. stocks slumped and yields surged on a renewed rise in core

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Global tactical asset allocation views brief

Global tactical asset allocation views brief

🕔13:45, 22.Sep 2022

Underpinned by waning inflation and strong job numbers in the US, equity markets started the month trending higher. Investors believed peak inflation would lead to a potential pivot in Federal Reserve (Fed) policy hawkishness. However, in his Jackson Hole speech,

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The Raisons d’être of Managed Futures

The Raisons d’être of Managed Futures

🕔16:22, 6.Sep 2022

The Federal Reserve has an explicit dual mandate. Managed Futures strategies have an implicit one – specifically, 1) deliver positive returns on average and 2) generate especially attractive returns during large equity …

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Rising Risk of Recession

Rising Risk of Recession

🕔16:33, 2.Sep 2022

May’s reprieve proved short-lived as recession joined inflation fears pushing equity/bond prices lower in June. Concerns have risen as the increasingly hawkish Fed rhetoric at its June meeting suggests a willingness to trade rising …

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Caution: earnings under pressure

Caution: earnings under pressure

🕔09:30, 30.Aug 2022

Weekly commentary – August 15, 2022 Stocks are rallying as markets believe inflation is waning and the Fed will slow hikes soon. We don’t think the rally is sustainable. Why? We see the Fed hiking rates to levels that will

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China: Politburo drops GDP target and decrees stability in H2 2022

China: Politburo drops GDP target and decrees stability in H2 2022

🕔10:43, 17.Aug 2022

China has once again captured the attention of investors seeking shelter from unprecedented global policy tightening. This is understandable, as the country was first in, first out of the Covid pandemic and remains ahead of the curve in terms of

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Inflation remains the priority amid slowing growth

Inflation remains the priority amid slowing growth

🕔14:36, 4.Aug 2022

The Federal Reserve did not surprise and raised its target range for the federal funds rate by 75 basis points to 2.25%-2.5%, referring to high inflation as its primary concern1 . A strong labour market supported a hawkish tone overall

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Global Asset Allocation: The View From Europe

Global Asset Allocation: The View From Europe

🕔12:41, 3.Aug 2022

Market Perspective Inflation concerns remain at the forefront for central banks and investors as global growth continues to trend lower amid supply disruptions, geopolitical challenges and reduction of liquidity, setting the stage for a challenging macro backdrop. The US Federal

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US Consumer Inflation: who loses less wins

US Consumer Inflation: who loses less wins

🕔17:00, 21.Jul 2022

June’s Consumer Price Index (CPI) was about the worst composition possible from a Fed perspective as it was (1) a broad-based increase that (2) accelerated. The base effect was supposed to be shading inflation down, but it’s been totally overrun

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Rates roller coaster

Rates roller coaster

🕔17:38, 12.Jul 2022

The US Federal Reserve’s (Fed) decision at its latest meeting to raise the fed funds rate by 75bp pushed expectations for the peak level next year to more than 4%. Simultaneously, fears that economic growth is slowing more quickly than

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Fed becoming worried about inflation expectations

Fed becoming worried about inflation expectations

🕔14:18, 11.Jul 2022

Federal Open Market Committee (FOMC) meeting and statement: On 15 June, the Fed hiked the Fed funds rate by 75bp, to 1.50-1.75%, the first 75bp rate rise since November 1994. Chair Jerome Powell confirmed that recent readings regarding consumer inflation

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Look to credit opportunities amid bond market rout

Look to credit opportunities amid bond market rout

🕔08:00, 11.Jul 2022

It is no secret that 2022 has been challenging for fixed income investors. High inflation and the US Federal Reserve (Fed)’s initiation of interest rate hikes have weighed on markets. Nevertheless, the broad credit universe provides ample opportunities for investors

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Why should you consider owning bonds now?

Why should you consider owning bonds now?

🕔10:58, 4.Jul 2022

The extent of the Q1 drawdown in fixed income markets was both large and rare relative to history. The aftermath of the pandemic and the conflict in Ukraine propelled inflation in developed markets around the world to multi-decade highs. In

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False narratives will cost you money

False narratives will cost you money

🕔08:17, 4.Jul 2022

Key Takeaways: The equity correction is likely over as recession is not 12 months away. Nominal growth remains extraordinarily high relative to Fed hawkishness. The US central bank remains “behind the curve” despite flagging 200bps of hikes by year end.

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Tech sell-off and bond temptation

Tech sell-off and bond temptation

🕔15:32, 14.Jun 2022

CROSS ASSET Investment Strategy – June 2022: The repricing of a more aggressive Fed stance has been brutal as the 10Y UST yield temporarily reached the 3% threshold, falling close to 2.75% recently on economic growth concerns. We think investors

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Don’t fight the Fed

Don’t fight the Fed

🕔15:17, 13.Jun 2022

Restrictive central banks and high inflation rates are likely to continue to weigh on the economic outlook. Macro outlook – The US Federal Reserve stays its course High inflation rates are increasingly permeating global economies, and sharp increases in commodity

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Downturn in the US financial cycle may be near

Downturn in the US financial cycle may be near

🕔08:37, 6.Jun 2022

With the US Federal Reserve in a full-on fight against inflation, concerns are rising that tighter monetary policy could tip the US economy into a recession. A look at longer-term financial cycles …

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Summary of Economic Projections

Summary of Economic Projections

🕔21:57, 3.Jun 2022

In conjunction with the Federal Open Market Committee (FOMC) meeting held on June 14–15, 2022, meeting participants submitted their projections of the most likely outcomes for real gross domestic product (GDP) growth, the unemployment rate, and inflation for each year

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Looming divergences and the great asset repricing

Looming divergences and the great asset repricing

🕔14:01, 25.May 2022

Diverging economic outlooks in Europe, US and China, along with persisting geopolitical risks, underscore the need to explore relative value opportunities across asset classes. On duration, we think investors should be flexible but no longer as short as they were

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Senior Loan Talking Points

Senior Loan Talking Points

🕔16:55, 12.May 2022

In an eventful week in which the Fed raised interest rates by 50 bps, the loan market was not immune to the continued selling pressure and negative sentiment that has plagued performance in other assets for virtually the entirety of

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Core Bond: No Time to Die

Core Bond: No Time to Die

🕔10:16, 10.May 2022

Following the bond market’s recent beating, term yields have already priced in aggressive Fed rate hikes, positioning core bonds to effectively diversify credit risk.

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A difficult balancing act

A difficult balancing act

🕔10:10, 9.May 2022

Global equities retreated in the first quarter of 2022 in the face of higher inflation and the war in Ukraine. The US Federal Reserve has become even more hawkish despite the increasing threat of a significant slowdown in economic growth.

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The Yield Curve Briefly Inverted, Now What?

The Yield Curve Briefly Inverted, Now What?

🕔09:08, 4.May 2022

The lead time of curve inversion to recession can be more than two years, so it’s not the best timing tool. However, what we do know with more certainty is the signaling that the economy is now firmly in the

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Cut through the static

Cut through the static

🕔16:03, 27.Apr 2022

Our initial 2022 outlook themes generally played out as expected in the first quarter: strong but slower economic growth, persistently hotter inflation, the onset of interest rate hikes and further bouts of elevated market volatility. But two developments were unexpected:

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Global Strategy 2Q 2022

Global Strategy 2Q 2022

🕔08:34, 18.Apr 2022

The uncertainty caused by the war in Ukraine, the sharp increase in commodity prices, and the deterioration of supply chain issues are dampening the economic outlook. At the same time, the inflation risks have increased drastically. The Fed has promised

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As the Fed moves into action, bond portfolios need agility

As the Fed moves into action, bond portfolios need agility

🕔10:55, 7.Apr 2022

In a world of rapidly escalating prices, Russia’s invasion of Ukraine has exacerbated inflationary pressures. We have seen a direct impact on energy and a broad swath of agricultural commodities, and are likely to see a broadening of price pressures.

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Hawkish Fed Begins New Era of Monetary Tightening

Hawkish Fed Begins New Era of Monetary Tightening

🕔10:15, 24.Mar 2022

Through the melee of mounting inflation, flaring geopolitical risks and subsequently volatile capital markets, the U.S. Federal Reserve met market expectations and increased the target federal funds rate by 25 basis points (bps) while also validating market assumptions for how

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There are decades where nothing happens; and there are weeks where decades happen

There are decades where nothing happens; and there are weeks where decades happen

🕔12:11, 22.Mar 2022

Since the dissolution of the Soviet Union, more than three decades ago, the NATO had tried to encourage dialogue with Russia. But, since 2014—when the previous severe political crisis between Ukraine and Russia took place, most of the cooperation efforts

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Investors confront volatility as Russia invades Ukraine

Investors confront volatility as Russia invades Ukraine

🕔12:00, 21.Mar 2022

When market volatility spikes, investors question what, if anything, they should do. Markets reacted strongly to news that Russia invaded neighboring Ukraine. The world has been watching tensions in the region escalate since the beginning of the year. Russia objects

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Normalize or ‘Volckerize’

Normalize or ‘Volckerize’

🕔14:43, 18.Mar 2022

In our view, the Federal Reserve (Fed) has two choices to make for their stance on future monetary policy: to normalize or ‘Volckerize.’ The latter refers to Paul Volcker, Chair of the Fed most remembered for raising the fed funds

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A Stagflationary Shock

A Stagflationary Shock

🕔08:34, 17.Mar 2022

The geopolitical crisis in Ukraine creates a stagflationary shock for global economies. Rising commodity prices have the potential to add momentum to already runaway inflation. Higher goods and services costs may hurt consumer confidence and create a drag on economic

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Sectors in Fed cycles

Sectors in Fed cycles

🕔16:05, 15.Mar 2022

The tragedy unfolding in the Ukraine has been the main focus for financial markets this week. The impact on global economic growth remains to be seen, but we believe that the US Federal Reserve will start tightening monetary policy by

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Volatility and uncertainty warrant higher risk premiums

Volatility and uncertainty warrant higher risk premiums

🕔11:34, 15.Mar 2022

In the light of rising inflation numbers, central banks have made sharp hawkish shifts. The Fed is now expected to hike rates five times this year and to start rolling off its balance sheet. Even the ECB is expected to

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BII Global weekly commentary

BII Global weekly commentary

🕔11:56, 14.Mar 2022

BII Global weekly commentary We up our strategic overweight to developed market (DM) equities, but near term elevated geopolitical tensions keep our tactical shopping basket on hold. Equities retreated as investors took renewed fright over the military stand-off involving Ukraine,

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Hot inflation and geopolitical tensions: cool down risk

Hot inflation and geopolitical tensions: cool down risk

🕔10:04, 11.Mar 2022

The geopolitical escalation at month’s end marks a further rise in volatility, even as the Fed and the ECB displayed hawkish overtures earlier. We suggest a more cautious stance in credit amid rising liquidity risks and a less appealing risk/return

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Volatility and uncertainty warrant higher risk premiums

Volatility and uncertainty warrant higher risk premiums

🕔15:18, 10.Mar 2022

In the light of rising inflation numbers, central banks have made sharp hawkish shifts. The Fed is now expected to hike rates five times this year and to start rolling off its balance sheet. Even the ECB is expected to

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Rising rates: what to know, what to do

Rising rates: what to know, what to do

🕔08:09, 8.Mar 2022

January’s market tantrum: Last month played out like Newton’s third law of physics with a twist: for every feared Fed action, there was an equal and opposite overreaction. The 10-year Treasury yield spiked 27 bps, and U.S. large cap growth

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Rising rates: what to know, what to do

Rising rates: what to know, what to do

🕔12:21, 3.Mar 2022

January’s market tantrum: Last month played out like Newton’s third law of physics with a twist: for every feared Fed action, there was an equal and opposite overreaction. The 10-year Treasury yield spiked 27 bps, and U.S. large cap growth

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Normalize or ‘Volckerize’

Normalize or ‘Volckerize’

🕔10:48, 2.Mar 2022

In our view, the Federal Reserve (Fed) has two choices to make for their stance on future monetary policy: to normalize or ‘Volckerize.’ The latter refers to Paul Volcker, Chair of the Fed most remembered for raising the fed funds

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Expect strong but slowing economic growth in 2022

Expect strong but slowing economic growth in 2022

🕔08:41, 25.Feb 2022

Outlook 2022: As we head into a new year, it’s clear in hindsight that the market downturn of 2020 was short-lived and entirely related to the COVID-19 outbreak. In my view, that means the powerful upswing in equity prices since

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Rising rates: what to know, what to do

Rising rates: what to know, what to do

🕔15:26, 17.Feb 2022

January’s market tantrum: Last month played out like Newton’s third law of physics with a twist: for every feared Fed action, there was an equal and opposite overreaction. The 10-year Treasury yield spiked 27 bps, and U.S. large cap growth

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Entering a new investment regime

Entering a new investment regime

🕔12:41, 8.Feb 2022

Stubbornly high inflation numbers have sparked nervousness among central banks, which are rapidly reverting to hawkish policies. The Fed is now expected to raise rates five times this year and to start rolling off its balance sheet. The ECB …

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Renteverhogingen door de Fed: welke opkomende markten lopen het grootste risico?

Renteverhogingen door de Fed: welke opkomende markten lopen het grootste risico?

🕔15:02, 4.Feb 2022

Ons model toont welke opkomende landen wellicht het meest kwetsbaar zullen zijn voor Amerikaanse renteverhogingen en welke het meest veerkrachtig zouden moeten zijn. Wanneer Amerika niest, vat de wereld kou. En wanneer 's werelds grootste economie de rente verhoogt, voelen

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Fed tightening: we favour equities and short duration

Fed tightening: we favour equities and short duration

🕔10:19, 2.Feb 2022

The Fed has told us it will soon raise rates. History suggests equities and short duration bonds will outperform over the coming months. The late start to this tightening cycle may complicate matters. So now we know – the Fed has

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December FOMC review: pressing the gas on taper

December FOMC review: pressing the gas on taper

🕔14:40, 19.Jan 2022

FOMC statement: The tone of the Federal Open Market Committee (FOMC) statement was hawkish, with a focus on higher inflation risks and more aggressive policy tightening. There were notable changes to the statement: the Fed retired the word ‘transitory’ to

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Fed makes a hawkish pivot

Fed makes a hawkish pivot

🕔10:51, 17.Jan 2022

Multi Asset Quarterly: The economic growth outlook is strong, driven by a resilient consumer, low inventories and infrastructure spending. The rapid rise in Omicron cases, however, may limit the service sector’s recovery in Q1 and push out the economic normalization

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Investing amidst the inflection in the fed policy cycle

Investing amidst the inflection in the fed policy cycle

🕔08:02, 11.Jan 2022

Key points The surge in inflation in 2021 combined with the sharp fall in unemployment leaves two of the US Federal Reserve’s key policy objectives within reach as the year comes to a close. Moreover, with US housing prices rising

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Monetary policy and the yield curve

Monetary policy and the yield curve

🕔08:45, 6.Jan 2022

Three hikes in 2022? At its December meeting, the US Federal Reserve left policy rates unchanged, near zero, while signaling a willingness to hike as many as three times in 2022 to combat inflation. It also announced an acceleration in

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Yields lower, curves flatter & stronger dollar.

Yields lower, curves flatter & stronger dollar.

🕔09:34, 14.Dec 2021

Core government bond yields were lower and yield curves flatter last week (see chart of the week). More hawkish rhetoric from the recently reappointed Chair of the US Federal Reserve has upset the short end of markets, forcing yields higher.

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Liftoff? EM has already taken off

Liftoff? EM has already taken off

🕔14:12, 29.Nov 2021

As U.S. inflation is hitting three-decade highs, market talk has been all about “liftoff:” When will the Federal Reserve and others start raising their policy rates? This is old news in emerging markets (EMs), where many countries have already raised

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