No one expects the Federal Reserve to raise rates at the meeting this week. A rate change of any kind, either up or down, would be a complete stunner. Instead, the big news on monetary policy this week is very likely to be the Federal Reserve announcing it will begin gradually trimming its balance sheet at the start of October.

Current estimates show a significant gap between the rate expectations of Wall Street economists and the Fed funds futures markets. The spread between their estimates for December 2019 is nearly 100 basis points, the equivalent of roughly four rate hikes. Over time, this gap in expectations is going to close one way or the other.

In her post-FOMC press conference, Federal Reserve Chair Janet Yellen is expected to provide a concise evaluation of the current economic situation. That includes a discussion about the recent trend in low inflation and the economic impact of hurricanes Harvey and Irma. She is not expected to signal what the Fed will do with short-term interest rates in the months ahead.

As many observers expected, after five months of surprisingly soft inflation prints, prices firmed in August. U.S. core CPI inflation (which excludes the volatile food and energy categories) was up 0.25%, boosted by the largest-ever one-month increase in hotel prices and surprising firmness in rents and owners’ equivalent rents (OER).

Value stocks have underperformed most other styles of investing, as well as the broad market, by a wide margin since the beginning of 2015. We see several reasons why, which point to the catalysts for a potential recovery; we do not think Value is past its prime.

With the top two positions at the Federal Reserve soon to be open, Russ discusses how the easy money era goes back a long way.

Invesco Fixed Income shares its views on rates around the world.

Last week, investors were lamenting the lack of inflation. This week, they’re fixated on its rise. On Thursday, data showed consumer prices climbed 0.4% in August from a month earlier and 1.9% from a year earlier, a sign that inflation is once again on the upswing after months of soft readings.

At the October 2002 market low, the S&P 500 stood -49.2% below its March 2000 peak (-48.0% including dividend income), with the Nasdaq 100 having lost more than -82.8% from its high, on the basis of both price and total return. The loss wiped out the entire total return of the S&P 500, in excess of Treasury bills, all the way back to May 1996.

The major US indices all recorded new all-time highs (ATH) this week. The very broad NYSE, covering 2800 stocks, also made a new ATH, suggesting the rally is supported by adequate breadth. Longer-term studies and the fundamental macro data continue to indicate that further upside into year-end is odds-on. On a short-term basis, there are several reasons to be on alert for weakness over the next week or two. An important FOMC meeting is on deck for Wednesday.

With its ability to validate all transactions in an immutable electronic ledger, the blockchain has the potential to be as disruptive as Amazon was in the late 1990s. When the company went public in 1997, there were serious doubts whether people would willingly give up their credit card information just to buy a book. Since then, Amazon stock is up 8,000 percent, and founder Jeff Bezos briefly overtook Bill Gates in July to become the world’s wealthiest person.

This commentary contains slides from a presentation by Paul Kasriel.

September has historically been a tough time for stocks and there are multiple potential pitfalls to look out for this year as well. But economic and earnings growth—both domestic and global—continues to look healthy and we expect the bull market to continue. Remain globally diversified, but also disciplined around target asset allocations; and use any volatility for rebalancing purposes.

Elected officials at all levels have promised workers they will receive pension benefits without taking the hard steps necessary to deliver on those promises. This situation will end badly and hurt many people. Unfortunately, massive snafus like this rarely hurt the politicians who made those overly optimistic promises, often years ago.

Robo advice is the newest disruptor in the financial industry and many advisors are not sure how to interpret this new investment advice solution. Some are writing it off as a solution for lower asset customers, some are concerned about the competitive threat, while others are embracing the technology for use in their own business.

Over my lifetime I have invested in many different things. In the process of doing that, I have learned that there are really only two types of investors. As an investor, you are either active or passive. Being active implies directly managing or being in control of your investment.

A review of last month’s market-moving events across countries and asset classes.

China is dropping its focus on “dirty” industrial growth, while making a massive shift toward renewable energy and a less resource-intensive path to economic success. This reorientation could open up substantial opportunities for equity investors.

So, I am sitting here in downtown Saint Petersburg, Florida at 7:30 a.m. Sunday morning awaiting the “great flood.” It was just a few days ago the computer models had hurricane Irma heading up the east coast of Florida, but Irma changed her mind.

The investing industry is constantly devising new acronyms and buzzwords. Sometimes these can be dangerous. The rise of the FANG stocks highlights how clusters of stocks may create investing hazards that standard risk models struggle to detect.

For the first time since we’ve been keeping track, two separate Category 4 hurricanes struck the mainland U.S. in the same year. It should come as no surprise, then, that the combined recovery cost of Hurricanes Harvey and Irma is expected to set a new all-time high for natural disasters.

Global markets have been relatively calm this summer despite many uncertainties. Geopolitical risks have continued across the globe, and in some areas, looming monetary policy changes also appear likely. A key question for many investors is whether the sleepy summer period of low volatility will give way to a more turbulent autumn.

The Federal Reserve is likely to decide next week to begin letting assets roll of its balance sheet as bonds mature, instead of reinvesting the proceeds. This means that the balance sheet will begin to shrink in size and other market participants will be forced to absorb the supply of new issuance of treasury and mortgage backed securities.

Unmet borrower needs continue to grow in the U.S. commercial real estate lending market.

Rick Rieder explains the economic implications of “the Amazon effect.”

Countless articles have been written in the past 10 years predicting (or warning) of China’s imminent financial demise, with the number of articles accelerating in recent years amid China’s debt build-up in the post Global Financial Crisis period. Investing on the basis of a “China collapse” view of the world would likely have resulted in more risk-averse portfolios in the emerging debt space and, hence, lower returns in recent years.

In recent weeks, the U.S. has experienced two natural disasters – Hurricanes Harvey and Irma. Much real property was damaged or destroyed by these two hurricanes. There will be an increase in construction expenditures to repair and replace damaged/destroyed buildings and homes.

Many investors no longer view the US as the global safe haven to turn to during bouts of volatility. We argue that US and global fundamentals remain strong, however, many global investors seem to be losing religion.

Co-CIO Francis Gannon sizes up the small-cap market, which looks primed for a leadership shift to cyclicals.