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The economy in 2023: Where we differ from market consensus

The economy in 2023: Where we differ from market consensus

🕔11:05, 30.Jan 2023

Jared Franz, for example, says the Fed will keep rates higher for longer, yet when the economy recovers, it will be stronger than prior rebounds. Meanwhile, Robert Lind argues that European policymakers will likely run looser fiscal policies and tolerate

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Recession looms for 2023

Recession looms for 2023

🕔08:24, 26.Jan 2023

Economic and Strategy Viewpoint The coming year is expected to be one of recession for the advanced economies with the eurozone now expected to join the US and UK in recording a fall in output for 2023 as a whole.

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Global Asset Allocation: The View From Europe

Global Asset Allocation: The View From Europe

🕔16:48, 24.Jan 2023

Market Perspective Volatility likely to remain elevated in the new year as central bank policy expectations diverge amid evidence of slowing growth and moderating inflation. While slowing the pace of tightening, the US Federal Reserve reinforced its commitment to taming

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The End of the Affair

The End of the Affair

🕔14:13, 11.Jan 2023

The affair with the market catalysts of the last decade is over now, and a new era of investing begins. It was nice while it lasted. The tattered posters on the cover show the remnants of some equity market catalysts

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The Aristotle List: 10 improbable but possible outcomes for 2023

The Aristotle List: 10 improbable but possible outcomes for 2023

🕔14:48, 10.Jan 2023

It is time to forget central scenarios and think about improbable but possible outcomes. Markets remain volatile, so our list of surprises errs to the positive (these hypothetical predictions are our views of what could happen even if they do

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Quick take: Five insights on Fed policy after the latest rate hike

Quick take: Five insights on Fed policy after the latest rate hike

🕔10:23, 22.Dec 2022

Capital Group portfolio managers consider the latest interest rate rise from the US Federal Reserve and what we can surmise from the slower pace of hiking.  The US Federal Reserve has slowed the pace of its interest rate hikes but

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The end of an era

The end of an era

🕔12:55, 16.Dec 2022

Monthly Investment Outlook: With the September swoon in risk assets, markets have simply moved to unprice the optimism built up over the summer about the prospects of a pause in Fed tightening …  

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The Federal Reserve will stay hawkish — what will that mean for markets?

The Federal Reserve will stay hawkish — what will that mean for markets?

🕔12:43, 27.Oct 2022

Stocks and bonds have pulled back since the Fed clarified its commitment to fighting inflation. Despite volatility, we believe equities will stay within a broad trading range and not retest earlier lows. Rising yields, particularly among spread assets, should make

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Into the unknown

Into the unknown

🕔10:22, 25.Oct 2022

Q4 2022 Investment Outlook: The global economy is facing a confluence of shocks, most recently the severe reaction in UK assets and FX to the new fiscal package (roughly 10% of GDP, unfunded). Market confidence has continued to slide on

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Recession risk – the point of recognition approaches

Recession risk – the point of recognition approaches

🕔12:50, 14.Oct 2022

Monthly investment outlook august 2022  Just as markets had to reprice a new interest rate regime in early-2022 amidst fading hopes for a transitory inflationary backdrop, they are now similarly beginning to recognise that the prospects of an economic soft

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Global Fixed Income Macro Outlook Twin peaks

Global Fixed Income Macro Outlook Twin peaks

🕔12:24, 13.Oct 2022

For all of 2022, we have focused on tighter monetary policy, discussing the dilemma faced by central banks (in ‘Czech Mate’) and their subsequent decision to prioritize the war on inflation (in ‘The Inflation Game’). As we peer into 2023,

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Central bank watcher: Work in progress

Central bank watcher: Work in progress

🕔09:01, 5.Oct 2022

It’s work in progress for central banks. But the meaning of this phrase differs depending on the bank in question. For the Fed it means taking policy rates another big step towards restrictive territory. The ECB seems to be edging

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Inflation is grinding gears, looking to downshift

Inflation is grinding gears, looking to downshift

🕔12:16, 4.Oct 2022

Fixed Income Perspectives – September 2022 Inflation is likely to be the driving market force through mid-2023 at least. The August US Consumer Price Index (CPI) numbers, though somewhat higher than expected, don’t change our outlook for inflation or Fed policy,

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Taking stock

Taking stock

🕔08:28, 4.Oct 2022

Balancing acts. As the Fed walks the line between curbing inflation and averting recession, anxious investors are seeking to balance the two risks. Amid the uncertainty, we believe stock selection matters more. As Q4 begins, we see …

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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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