Uncertainty is the dominant theme in the equity market landscape of April 2023. Despite the anticipated end of the Federal Reserve's hiking cycle, the report underscores that this focus might miss the real picture. The Fed hikes are, in essence,
Q2 2023 Global Market Outlook Full Report The text highlights the current economic landscape, characterized by resilient growth, slowly receding inflation, and continued monetary tightening by central banks. This creates a favorable environment for government bonds and uncertainty for equity
The recent banking crises in the US and Switzerland have sparked concerns about the stability of the global financial system. However, these crises are unlikely to pose a broader threat. Despite this, lending standards are anticipated to tighten and inflation
The main theme of the text revolves around the recent banking crisis and the challenges faced due to policy tightening. The author highlights the Fed's response to regional bank failures, providing liquidity provisions to protect depositors and prevent widespread economic
The discussion in "Macro musings: The Fed, payrolls, and what to make of it all" revolves around the Federal Reserve's decision to hike rates, the effect on market pricing, and the potential scenarios that might prompt a change. While the
The latest data on inflation has led to concerns about the economy, with some fearing that hot inflation and economic data could lead to an increased chance of recession, even if it takes longer than first expected. The Federal Reserve
Last week brought good news on US inflation but the declines were even more dramatic in Europe. However, core inflation in the Eurozone has yet to peak. We believe it will follow headline inflation lower but the ECB may want
The sudden collapse of Silicon Valley Bank and Signature Bank raised concerns about the investment outlook, highlighting three major problems. Firstly, the banks had a narrow depositor base with a large percentage of uninsured deposits, which was concentrated in troubled
The Federal Open Market Committee (FOMC) meeting held in March 2023 included projections of the most likely outcomes for real GDP growth, the unemployment rate, and inflation. Each participant's projections were based on their assessment of appropriate monetary policy and
Rate Hike and Banking Sector Stability. In a widely anticipated move, the US Federal Open Market Committee (FOMC) increased rates by 25 basis points, despite recent upheaval in the banking sector. The FOMC stated that the US banking system is
The post-Covid rally in global private equity came to a halt in 2022, with the Federal Reserve's move to raise interest rates being a key factor. The rate increases sparked concerns about persistent inflation and fueled speculation about recession, causing
Market reactions to the ongoing banking turmoil resulted in a significant downward revision of expectations for the policy rate of both the Federal Reserve and the European Central Bank (ECB). The market expressed its skepticism regarding the central banks' ability
March 2023 2022 was certainly a tumultuous time for investors. The year was dominated by the Federal Reserve’s actions to fight inflation, particularly given the widespread perception earlier in the year that it was behind the curve. US Core inflation stood
Guy Haselmann, Head of Thought Leadership at MetLife Investment Management, recently sat down with Scott Pavlak, Head of Short Duration Fixed Income, to discuss interest rates and the investment landscape in short duration bonds. Guy: What a difference a year
The US authorities took out the “big guns” and acted decisively before the market open to contain the spill over effect from the demise of SVB (now accompanied by Signature Bank) using a two-pronged approach. First, they will “make good”
First things first, the seasonals With the most recent release of nonfarm payrolls, I saw a lot of the focus placed on the seasonal adjustment being the source of upside and I believe this misses the point. Yes, seasonals likely
Global tactical asset allocation views brief After a weak 2022, the grass seemed a lot greener at the start of 2023, with equity and bond markets roaring back strongly. The optimism was fueled by a continuation of weaker headline inflation
Monthly investment outlook Stock and bond markets continued to rally in January as falling energy prices, a reopening in China and hope for Fed rate cuts ahead drove optimism across asset classes. This optimism belies growing divergence between expectations implied
FIXED INCOME OUTLOOK JANUARY 2023 The latest data suggests that the US economy is headed towards a period of below-trend growth, if not outright recession. The effect of monetary tightening on aggregate demand is becoming evident, while supply chain pressures
The US Federal Reserve (Fed) downshifted at its February meeting, raising its benchmark interest rate by just 25 basis points (bps), as inflation has begun cooling in the US. This move was widely anticipated by markets, which have begun pricing
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
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.
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
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
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
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
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 …
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
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
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
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,
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
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,
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 …
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
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,
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 …
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 …
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
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
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
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
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
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
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
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
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
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.
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
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
