Recessions 101
The markets hit turbulence this week, with the Dow dropping almost 500 points on Wednesday, October 2...
Global Economy Muddles Along
The U.S. economy continues to perform well when compared to the rest of the developed world, and is still exhibiting growth near its long-term trend. The outlook in other developed economies is not quite as bright, however, as unconventional and aggressive policy decisions from global central banks are becoming increasingly ineffective...
Hope in Humanity
When you turn on the evening news, every broadcast seems to bring more stories of tragedy, fighting, and petty politics. But if we take the time to a look a little closer, we often find that amidst the doom and gloom, people all around the world are constantly demonstrating courage, charity, and sacrifice. So, I’d like to share an inspirational story I’ve come across that shows how even a little bit of kindness can make a big difference...
Central Banks Are Back
After a decade of easy money, the 2017 Tax Cuts and Jobs Act provided incentives for investment, and in 2018, the regulatory environment had eased and additional government spending programs further boosted demand. In fact, in our 2018 Outlook: The Return of the Business Cycle, we highlighted the return of fiscal leadership as a primary driver for economic and market activity. The improved growth environment led to a tighter monetary stance from the Federal Reserve (Fed) in 2018, even as the contentious trade environment diminished business investment.
The Curious Case of Negative Yields
There’s a growing pile of negative-yielding debt around the world amid extraordinary monetary policy initiatives. While maintaining respect for global money flows, we believe the combination of economic fundamentals, domestic monetary policy, and a widening federal budget deficit limit the prospects for subzero yields in the United States...
U.S. Treasuries and The Yield Curve
We recently reduced our year-end forecast range for the 10-year U.S. Treasury yield from 2.5–2.75% to 1.75–2%. This significant reduction reflects what we consider the many somewhat curious aspects of the domestic and global macroeconomic environments. Trade uncertainty, low inflation, geopolitical risks, monetary policy, and relative valuation all played a role in our decision. To be sure, delayed prospects for a U.S.-China trade agreement remain central to our economic and market projections in the coming months.
