Economic Insights

In August, a flurry of ETF-related deals were announced and expected to close by early 2027. Goldman Sachs is buying NEOS Investments. T. Rowe Price plans to add F/M Investments. Victory Capital is acquiring First Eagle.

A popular narrative for the rise in bond yields over the past few months is that the debt-funded AI capital expenditure cycle is crowding out the Treasury market. The crowding-out argument can appear compelling: AI companies are expected to continue to issue unprecedented amounts of debt at a time when Treasury supply remains elevated. Because both ultimately draw from the same pool of investor capital, yields must rise to clear the market.

As summer officially gives way to fall on September 22, it's not just the weather that's changing. The global monetary policy landscape is shifting as well. After spending much of the past two years focused on supporting growth, central banks have increasingly turned their attention back to inflation, especially with oil prices climbing back above $100 per barrel.

This week's Federal Open Market Committee (FOMC) decision was largely in line with expectations. While many market participants and Federal Reserve (Fed) members anticipated another rate increase later this year, we remained in the camp that viewed the move as likely the last increase before the Fed adopted a wait-and-see approach, allowing geopolitical developments to stabilize and recent inflationary base effects related to the US-Iran war to fade.

The Federal Reserve increased rates by 25 basis points this week, a remarkable turnaround with major implications for portfolios of all kinds; one underexamined impacted area may be annuities.

The K-shaped economy is real, and it is old. What changed isn’t the shape of the economy; it’s just that the media found a narrative that gets lots of clicks and views, and we let headlines do our thinking for us.

Catherine LeGraw and B.J. Brannan of GMO's Asset Allocation team discussed the role of liquid alternative strategies in today's investment landscape. 

Advisors outsourcing at least 20% of assets reported saving 9.1 hours per week, or approximately 473 hours annually. WisdomTree research found 90% of investors welcomed third-party model portfolios, suggesting clients may be more comfortable with outside expertise than advisors expect.

We are never going to get rid of the FOMC for political and practical reasons. For those of us who would like to see the market set rates without an FOMC intervening, this is as good as it’s going to get.

The Federal Reserve raised interest rates this week, in part to reset consumer expectations on inflation. Their work is likely not done, as there is a negative surprise coming for many consumers, especially in rural America. Winter is coming, and that means the return of home heating bills. Depending on how you heat your home, your bills could be much higher this winter.

The Federal Reserve (Fed) made something clear this week that markets had been reluctant to accept. Apparently, the easing cycle isn't paused, it's over for now.

In an environment marked by the Fed’s first rate hike in three years and ongoing market uncertainty, income-focused investors face a unique dilemma. While cash alternatives offer attractive yields in the short-term horizon, they leave portfolios vulnerable to reinvestment risk should the

For decades, equity investors have relied on a foundational promise from Corporate America: the continuous return of surplus cash. Dividends and share repurchases represent the two primary ways by which companies deliver tangible value back to shareholders. Yet as we navigate the final stretch of the third quarter of 2026, both channels are signaling a distinct shift toward restraint.

The new investment case for global power, security and affordability. The phrase “energy transition” has served as a useful political and cultural shorthand, but it has become a misleading framework for capital allocation. Franklin Templeton Institute explodes new opportunities for investors—and where shifts in thinking may be needed.

The U.S. Federal Reserve delivered on consensus expectations by raising its policy rate by 25 basis points (bps) at its September meeting.

Municipal bonds might still offer attractive tax-advantaged income and relatively stable credit quality for investors who understand the risks.

Stocks have recently hit new highs, supported by strong earnings growth, but the bond market is sending a more cautious signal.

The recent global bond sell-off may be more than a temporary repricing. Rising government debt, persistent inflation risks and shifting economic expectations could keep longer-term yields elevated relative to the post-financial-crisis era.

The 2026 U.S. midterms are rapidly approaching, with major implications. Muni bonds, in particular, may be impacted.

The shortened Labor Day trading week brought little cheer for stock and bond investors. Coming off a long weekend that saw increased hostilities between the US and Iran, oil prices pushed higher, topping $100/barrel. Gas and diesel prices also spiked: diesel hit an all-time high of $6/gallon, while regular gas jumped to a Labor Day record of $4.15/gallon.

The Federal Reserve today unanimously decided to raise its short-term interest rate target by a quarter percentage point to a range of 3.75 – 4.00%, the first hike since mid-2023. The Fed made two key changes to the statement announcing its decision, declaring that “domestic spending has been resilient” and the rate hike “will support a timelier return” to the Fed’s 2% inflation target.

Fed policymakers unanimously voted to raise rates 25 basis points, the first hike since 2023, and vowed to fight inflation. Another hike is seen this year, but 2027 is in question.

The Federal Open Market Committee (FOMC) decided to raise rates by a quarter-point, bringing the new fed funds trading range to 3.75%–4.00%. The money and bond markets had been pricing in a potential rate hike at this gathering, and Warsh & Co. ultimately determined that such a move was warranted. That said, the ‘rate hike’ story does not end here.

Last December we published Riding the Wave: The Anatomy of Booms & Bubbles. In it, we argued that the AI spending boom would continue through 2026 without tipping into ‘bubble’ mania, and that the right posture was to stay overweight stocks while favoring US assets. Nine months on, we think that call has aged well.

With so much attention focused on what the Fed might do at its policy meeting this week, it’s a good time to look back at history to get a sense of how stocks might respond should policymakers hike rates as the market now expects. LPL Research had been characterizing the rate decision as a coin flip until Fed Chair Kevin Warsh’s hawkish comments at the Jackson Hole meeting and the strong August jobs report.

From the 2020 pandemic to today’s oil shocks, we’re often reminded in recent years that inflation can flare up unexpectedly. We’ve also likely entered an era in which higher inflation may linger for some time. As a result, bond-heavy and income-oriented investors may need to shore up their inflation defense, which we think should combine strategic positioning with tactical maneuvering.

The Consumer Price Index (CPI) data for August was generally in line with expectations. However, a slightly hotter-than-expected core CPI reading buoyed expectations of a rate hike at the Federal Reserve meeting in September.

The August employment report was much stronger than expected and reinforces my view that the U.S. economy remains remarkably resilient. Payrolls increased by 162,000, above every estimate, while revisions added another 55,000 jobs to the previous two months.

A rate hike on Wednesday is now very likely but would also be unusual, and perhaps dangerous, at least as far as the past generation of monetary policy goes.

A week of rising oil prices and higher interest rates sent stocks lower across the board as investors increasingly priced in the likelihood that the Federal Reserve (Fed) will begin a rate-hiking cycle at its September 16 meeting. Following the August Consumer Price Index (CPI) report, futures markets implied an 88 percent probability that the Fed will, or at least should, raise rates at next week's meeting.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

Last week, the refining margin on European gasoil, the benchmark that sets the price of diesel and heating oil across much of the world, closed at roughly $94 a barrel over Brent crude, according to Bloomberg data. That figure is normally somewhere between $12 and $18.

As policymakers adapt to new leadership, navigate a challenging geopolitical backdrop and contend with meaningful internal debate over the path of interest rates, the stakes remain high. Below, we discuss what to expect from next week’s Federal Reserve (Fed) meeting and provide perspective on the recent rise of Treasury yields to multi-year highs.

Attractive yields and resilient credit conditions are creating opportunities across fixed income, but uncertainty around inflation and interest rates makes flexibility, selectivity and disciplined risk management especially important.

Every few months, a new essay declares that the US debt trap has finally sprung. The latest one making the rounds from The Economist is well written and genuinely unsettling. It argues that Washington has borrowed so recklessly that the Federal Reserve no longer dares to raise interest rates. Doing so, the piece warns, would detonate the whole structure and send financing costs spiraling out of control.

Equity markets generally moved lower as rising yields and energy prices created a more challenging backdrop. Higher yields can be particularly difficult for long-duration equities, where a greater share of expected cash flows sits further into the future.

Some investors are questioning how much further this year’s rally can run with the S&P 500 Index up 12.3% through the first eight months of the year. Encouragingly, history suggests that strong starts tend to persist; when the S&P 500 has gained more than 10% through August it has advanced from September through December in 25 of 28 instances, an 89% positive hit rate.

Occasionally, we are confronted with decisions where there are no easy options. The prevailing circumstances bound our choices, and we may face criticism no matter what we do. Collectively, the Federal Open Market Committee (FOMC) finds itself in just such a situation as it prepares for its upcoming meeting.

The recent employment report provided reassurance that the US labor market remains resilient. The economy added 162,000 jobs in August; the previous two months’ gains were revised higher by a combined 55,000, and the unemployment rate held steady at 4.1%.

There is so much going on, it is hard to know where to begin. The data is all over the place. I had a long and epic dinner in New York with David Bahnsen, Rene Aninao, and Brian Syztel which has my mind buzzing with ideas and new concepts.

Don't let September's macro headline noise fool you. Today’s economic backdrop won’t likely trigger a broad market freeze like 2022, but there will be winners and losers. Cash-rich mega-caps, AI infrastructure plays, and scaled market leaders (the SpaceX, Anthropic and OpenAI tier) command their own gravity.

U.S. equities were little changed on the week – the S&P 500 rose 0.1 per cent, the NASDAQ gained 0.4 per cent, and the Russell 2000 added 0.12 per cent – but those modest moves masked a far more turbulent week in the global rates markets.