The long-anticipated unwinding of quantitative easing (QE) in the US is set to begin, just as the Fed’s leadership faces a wave of turnover. We think a strong foundation should keep steady US economic growth on track.
Speculation is building about a looming shake-up in the leadership of the US Federal Reserve. Transitions are nothing new—but the stakes this time are unusually high for the economy and markets.
James Montier and Matt Kadnar, members of GMO’s Asset Allocation team, have just published a new white paper -- “The S&P 500: Just Say No” -- warning of the risks to investors throwing in the towel on valuation, diversification and active management in favor of a passive allocation to large-cap U.S. equities.
The Trump administration is starting to consider a replacement for US Federal Reserve Chair Janet Yellen after her term expires. This is only one potential leadership change in what could be a wave of turnover ahead for the institution.
Passive investing strategies continue to attract big money. But think carefully before choosing to track a benchmark in emerging markets (EM). Active managers offer several clear benefits for equity investors in the developing world.
The Fed just gave us its wish list in a best-case scenario. But as the saying goes, if wishes were horses, beggars would ride. In short, Chair Yellen’s remarks, while detailed, are largely theoretical and dependent on many variables that may or may not happen. It would be wrong to assume that a bear market in bonds is a foregone conclusion.
May’s labor-market report disappointed, with every meaningful indicator lower than expected and down from last month. But we don’t believe it’s weak enough to stop a June rate hike or knock the Fed off track.
US inflation bounced back last month, but by less than expected. The data should support two more rate hikes in 2017, but if inflation doesn’t pick up, it may impact plans for more aggressive policy tightening down the road.
In an interview, AB’s new US Senior Economist, Eric Winograd, explains why he expects the US economy to continue growing and the Fed to raise rates two more times this year. He also highlights two risks: populism and protectionism.
Minutes from the Federal Reserve Open Market Committee (FOMC) March meeting highlight key aspects of the committee’s thinking, including the committee’s intent to reduce its balance sheet gradually over time.