Why the Fed might move in June
We think there is a possibility that the Fed could raise rates at just about any time, including between meetings.
Author: Jason R. Vaillancourt, CFA, Global Macro Strategist
Why low oil prices may last
Oil prices are often volatile, but we see some longer term factors at work on both the supply side and the demand side of energy markets.
Keeping an eye on Europe’s deflation risk
Should deflation emerge in Europe, it may pose a more difficult challenge today than in recent years.
Inflation likely to pressure the Fed
The most pressing issue for global markets for the remainder of the third quarter will be the mounting challenge for the U.S. Federal Reserve to keep reinforcing its “optimal control” framework in the face of higher inflation data. Striking the right balance The Fed has a dual mandate under the law: to pursue policies that
Like the weather, the economy should warm up
The polar vortex that spread across great swaths of North America several times this past winter numbed economic data. One way to understand the impact of winter is to analyze heating degree days. These calculations measure the energy consumption required to heat buildings and appear on the monthly utility bills of many homeowners. Based on
Japan’s reforms face moment of truth
Regarding Japan, we have expressed optimism in recent quarters about the potential economic gains from Prime Minister Abe’s reform program. In 2013, the government and the Bank of Japan unleashed a combination of expansionary policies focused on stimulating economic activity and weakening the yen to give Japanese exporters greater global competitiveness. Results so far have
Three reasons this credit cycle may be lasting
Today, more than four years into the recovery, capital market opportunities are shifting, with conditions in credit sectors such as high-yield corporate debt becoming a bit less attractive. However, the current cycle has different characteristics that suggest investors should not abandon credit strategies just yet. Let’s consider the features of a typical cycle, such as
Rate volatility poses more risk than rising rates
While rising bond yields are consistent with a strengthening economic recovery, they also prompt the concern among businesses and investors that higher interest expenses could become a drag on continued expansion. Rising rates signal stronger economy We take a relatively positive view of the possibility of rising rates, which are also a symptom of better
Developed markets forge ahead
Emerging markets are vulnerable to the marginal tightening of U.S. monetary policy, we believe, caused by the reduction in bond purchases by the Fed. In December, the Fed announced it would reduce its $85-billion-per-month bond-purchase program by $10 billion beginning in January. Although the Fed describes the reduction as less accommodation — rather than marginal