Beyond Bulls & Bears

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Fixed Income

Snapshot View: Fed Remains on Hold

If the United States is actually experiencing a 'new normal' where growth remains lower long term, then the Fed risks fueling real or asset-price inflation by being too lax with monetary policy going forward.

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Fixed Income

Will the Fed Take a (Rate) Hike?

With major US market averages hovering near all-time highs and the US economy showing modest growth, I believe that the Fed has the ammunition it needs to pull the trigger and raise its short-term interest rate, possibly this year.

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Fixed Income

Why Higher Interest Rates Could Draw Yield-Seekers to Leveraged Loans

We believe that having a possible deluge of perhaps unqualified borrowers flood the market will make fundamental and independent research even more important for potential investors in this asset class.

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Perspectives

Global Economic Perspective: July

In terms of monetary policy, we had expected the BOE to move into easing mode, though it chose not to do so at its July meeting, but we think the ECB will try to gauge the impact of the UK result, rather than rush to expand or extend its current program of bond purchases.

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Fixed Income

Brexit: “I Have Confidence in Confidence Alone”

I do think we’re at a most extraordinary valuation metric across many bond markets that again goes further than just any possible impact on the United Kingdom. For Europe, this situation amplifies the negative growth shock.

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Perspectives

Global Economic Perspective: June

Our view is that the US economy remains on course to pick up over the rest of this year, despite May’s disappointing payroll report and the Fed’s subsequent decision at its June meeting to leave interest rates unchanged. We do not place too much importance on this single piece of data and believe the economy’s robust fundamentals are likely to fulfill the Fed’s criteria for tightening monetary policy fairly soon.

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Perspectives

Global Economic Perspective: May

The road toward the ECB’s target of 2% inflation will likely be long, but we maintain our belief that the central bank is currently pursuing all of the politically feasible policies at its disposal that can encourage a further revival of economic activity and help achieve that goal.

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Fixed Income

There Is a Way Forward for Brazil

We see clear consensus among observers that reforms have to be done in Brazil, but there is only mild optimism about the political will to adopt even a very conservative reform effort ... It won’t be easy, but there is a way forward for Brazil.

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Fixed Income

Why Investors Yield to Australia’s Bond Market

We believe the RBA doesn’t feel the need to act on its easing bias because the Australian economy remains reasonably healthy, albeit at a pace of growth that is at the lower end of what policymakers would like to see.

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Global Economic Perspective: April

We have some apprehension about the more dovish stance taken by the US Federal Reserve, which in our view may place too great a focus on global factors, despite a relatively tight US labor market and some indications of a pickup in core inflation.

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Fixed Income

A More Accommodative Fed

While market consensus currently seems unconcerned about inflation, we know this could change quickly. Longer term, we certainly think higher-than-anticipated US inflation is a potential risk.

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Global Economic Perspective: March

We regard the greater stability in commodity prices, along with a lessening of volatility in financial markets, as welcome, and believe it should provide a more stable platform for the global economy, where growth remains acceptable, if lower than desirable.