Topical Links
Addressing Concerns of the Day
UPDATE ON THE WUHAN VIRUS, INCLUDING THE POTENTIAL ECONOMIC AND MARKET IMPACTS
A timely piece by our partners at RBC Global Asset Management. Concise and to the point. We'd encourage all to read.
Date of Posting: January 28, 2020
Suitability Rating: 1 - Straightforward and Easily Accessible
MIGHT EXPERTS (INCLUDING THE FED) HAVE TO RE-EVALUATE THE LEVEL OF CAPACITY IN U.S. EMPLOYMENT WHILE ALSO MODIFYING THEIR INFLATIONARY MODELS?
An interesting and timely article from the New York Times looking at the exceedingly strong U.S. employment picture, and whether it might be time to reconsider what the U.S. economy is capable of achieving in light of persistently low inflation.
Date of Posting: December 6, 2019
Suitability Rating: 1 - Straightforward and Easily Accessible
WHAT, IF ANYTHING, IS PREVENTING NEGATIVE INTEREST RATES?
Negative interest rates have become reality through much of the developed world outside of North America. Whatever the cause (and our October 3 posting two articles below makes the case that demographics are the culprit), is there any structural reason why it couldn't happen here? Despite the U.S. Federal Reserve's musing that it wants to maintain the sanctity of the "zero bound" (i.e. keep interest rates positive), this well supported article suggests that negative rates could easily become reality in North America too. Refinitiv, and the their partner Fathom Consulting, argue it's time to take the prospect seriously.
Date of Posting: November 4, 2019
Suitability Rating: 2 - The case is compellingly made, requiring a modest understanding and interest in financial concepts
WITHOUT MUCH FANFARE, THE YIELD CURVE "UN-INVERTS"
Kevin Flanagan, Head of Fixed Income Strategy for Wisdom Tree Investments, writes about the recent un-inversion of the bond yield curve. Owing to a media predisposition for negative news headlines, this closely watched recession indicator received broad-based news coverage (even outside of the traditional business news) when it inverted earlier in 2019. The un-inversion, not so much. Interestingly, like RBC, Mr. Flanagan holds the view that the U.S. economy will avoid recession, even using the same "base case" terminology that I and RBC have been using throughout most of this year. The article is short, easy to understand, and very much to the point.
Date of Posting: October 23, 2019
Suitability Rating: 1 - Straightforward and Easily Accessible
WILL INTEREST RATES MEANINGFULLY RISE WITHIN A GENERATION?
One recurrently topical theme in our weekly updates, as well as a question we consistently receive from clients, is what our team's expectation is for the direction of interest rates. Not surprisingly, owing to the tie between interest rates and the economy, we consider this question from a variety of angles on a nearly daily basis. However, taking a step back, and looking even beyond the multi-year economic cycle, demographics suggest we may be dealing with near zero rates for much longer than anyone ever expected. Perhaps a time frame measured in generations.
Date of Posting: October 3, 2019
Suitability Rating: 1 - Straightforward, and of Nearly Universal "Interest" to all Readers