All Inflation articles – Page 9
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VideoFixed Income update – September 2024
With speculation around further US interest rate cuts, is the market getting ahead of itself? In this edition of Talking Markets, Head of Fixed Income, Lloyd Harris, discusses the US labour market, the upcoming US election and what this could mean for fixed income investors.
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White papersSeptember jobs report: Not as weak as once thought?
The September jobs report showed a 254,000 monthly job gain, blowing all estimates out of the water. Not only does it suggest that the U.S. labor market is on a stronger footing than most believed, but it also suggests that the Fed does not need to maintain such an aggressive pace of rate cuts. Market expectations for a 50bps cut in November have rightfully plunged, and a 25bps reduction is now the clear market consensus.
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White papersUS election: the Inflation Reduction Act (IRA) and the risk of repeal – Implications for investors
In November the US goes to the polls to decide who will be the next president – the Democrat incumbent Joe Biden or returning Republican nominee Donald Trump. Under Biden, in August 2022 the US introduced the Inflation Reduction Act (IRA), a federal law which aims to, among other things, invest into domestic energy production while promoting clean energy. It represents the largest ever Congressional investment in the energy transition.
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White papersRate Expectations
Much has been written about the pace of likely interest rate cuts from the U.S. Federal Reserve. We continue to expect a total of 75 bps by year end, with a first cut of 25 bps at the next Federal Open Market Committee Meeting on September 17-18.
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White papersThe Fed pivot arrives
“Inflation moving towards the Fed’s target is allowing the central bank to shift its focus to economic growth. This underscores the importance of bonds as a diversifier* in an overall agile stance.”
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White papersU.S. Federal Reserve policy decision: securing a soft landing
The Fed’s aggressive 50 basis point rate cut, while unconventional, reflects a proactive approach to stave off any potential economic weakness. Despite associations of such large cuts with crises, today’s economic backdrop remains resilient. With recession risks receding and a favorable historical pattern during non-recessionary rate cutting periods, investors have reasons to remain cautiously optimistic about the market’s near-term outlook.
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White papersReal Estate House View: Europe - Second half-year 2024
The sharp surge in inflation prompted central banks to implement the most aggressive monetary policy tightening for at least four decades.
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White papersGlobal Market Perspectives Q3 2024: Losing some of the shine
Global growth has broadened beyond just the U.S. But the limited nature of the upturns implies U.S. dominance remains.
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PodcastOuterblue Convictions – Global Investment Views – Back to reality
This August financial markets went on a rollercoaster ride. Stock markets started the month with huge declines and soaring volatility, before recovering towards month end. What lessons should investors take away from this summer’s events, as the market jitters continue into September?
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White papersMacroeconomics, Geopolitics, and Strategy - September 2024
The rise in the July unemployment rate to 4.3% (latest reading in August is 4.2%) triggered a significant market concern about a possible weaker-than-expected US labour market, raising the risk of an impending recession. We do expect a significant slowdown of the US economy, but not a recession. We expect a significant deceleration in the next few quarters, consistent with a broader weakening of many labour market indicators.
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Asset Manager NewsGARBE PYRAMID-MAP: Forecast Sees Rental Growth Outpace Inflation in Germany’s Top Markets
Germany’s logistics real estate market is showing first signs of recovery. For one thing, the transaction volume picked up some steam during the first half of 2024.
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White papersInflation Quarterly Monitor
Central banks continue to tread carefully when it comes to monetary easing, expressing cautious optimism about inflation yet refusing to commit on the future path of policy rate decisions. Amidst falling inflation and slowing growth, the added complexity of political risk in the US, Europe and the UK has brought greater uncertainty. Even after the European Central Bank (ECB) acted as the first mover to cut policy rates in June, other central banks did not immediately follow in their June meetings.
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White papersArticle Shopping around: The outlook for US retail
While remaining broadly cautious on the US retail sector, the credit team explain why they are focusing on names with turnaround stories where they see upside catalysts and better relative value.
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White papersRate cuts: Now may be the time to extend duration
With the Fed likely to begin its rate cutting cycle in September, investors should consider extending duration now in high-quality fixed income to capture potential gains. Historically, bond yields drop ahead of Fed rate cuts, offering a window of opportunity to enhance returns without waiting for official policy shifts. Positioning in longer-duration assets now can provide income stability and potential price appreciation in a slowing economy.
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White papersGenerating returns in uncertain regimes
As the last few years have aptly demonstrated, pandemics, wars and wildly fluctuating economic variables such as surging inflation and sweeping interest rate hikes have all contributed to heightened periods of uncertainty and volatility in financial markets, often at the expense of patient and unassuming long-term investors. Stuart Canning, Fund Manager in M&G’s Multi Asset Team, assesses the value of Dynamic Multi-Asset allocation in a world of shifting expectations.
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White papersSeizing value in emerging market debt
Despite recent challenges, emerging market economies remain robust and are delivering positive growth. India is leading the charge, benefiting from secular demographic trends like a growing working-age population as well as resilient domestic demand. As China’s share of global growth declines, India is stepping in to fill the gap. More broadly, EM growth projections have been revised upward by the IMF’s World Economic Outlook (WEO), benefiting from country-specific factors.
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White papersCentral banks divergences on display
The Fed left interest rates unchanged in its latest policy meeting in July but acknowledged that price pressures are subsiding. This could encourage the Fed to reduce interest rates later this year. Across the Atlantic, the Bank of England (BoE) implemented its first rate cut since early 2020 on abating inflation in the UK. In contrast, the Bank of Japan (BoJ) raised policy rates for the second time this year to control upward pressures on inflation.
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White papersA Change in Leadership?
As Biden withdraws, we are seeing an historic rotation into small-cap stocks and a growing opinion-polling lead for Donald Trump—are the two things related? “What I write here on Friday could be out-of-date by the time you are reading it on Monday,” said Joe Amato, in last week’s commentary on the rise in political volatility.
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White papersReal Estate Convictions: An Asset Manager’s View of the European Real Estate Markets
Despite the uncertainties, the global economy showed remarkable resilience in the first six months of 2024. However, growth remains uneven, and difficulties persist. At the same time, the economic upheavals of the past four years should gradually ease. Global growth forecasts currently stand at +2.6% for 2024, before a more dynamic recovery in 2025 (+2.8%).
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White papersU.S. election: Policy and positioning
Heading into a contentious U.S. election season, investors need to avoid the noise and remain focused on the factors that will drive markets in the period ahead, including U.S. trade policy (particularly with China), geopolitics (particularly any impact on oil markets), and fiscal deficit management (given the CBO projection that the U.S. budget deficit is set to rise to 122.4% of GDP by 2034).
