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Developed Countries

Pulling Inflation Lower Means Pulling Profits Sharply Lower
The biggest driver of structural inflation is wage inflation. This is because wages are the main cost in the services that comprise about two-thirds of any developed economy. To be more precise, the biggest component of structural inflation is wage inflation…
Daily Insights
CBAM: EU Emissions Evangelism

The initial phase of the EU’s ambitious CBAM will launch 1 October and will begin collecting a carbon tax in 2026. Between now and then, it will be challenged as it attempts to put a price tag on CO2 emissions as imports cross the EU border. The CBAM will impart an inflationary bias in EU commodity and goods markets as 2026 draws near and importers have to secure EU ETS credits, the number of which, by design, will contract over time.

Commodity & Energy Strategy
May FOMC Meeting Recap

The Fed hiked 25 basis points at yesterday’s FOMC meeting while also signaling that the tightening cycle is now on hold. We discuss the short-run and long-run implications for Treasury yields.

US Bond Strategy by Ryan Swift
Resilient US Services
Data released on Wednesday confirm that the US services sector remains a source of resilience in the US economy. Both the ISM Services Index as well as the final estimate of the alternative S&P Global Services PMI moved further above 50 in April,…
Daily Insights
Pause Ahead?
As expected, the Fed delivered a 25bps rate hike on Wednesday. However, the FOMC statement and Chair Jay Powell’s post-meeting remarks signaled that this increase may mark the end of the tightening cycle. Notably, the sentence indicating that “the…
Daily Insights
Global Small Caps: Value Versus The Cycle
Global small cap stocks have underperformed large caps by roughly 7% since the beginning of March, in response to concerns about the global banking system. Smaller firms are generally less able to access funding through capital markets, and thus are more…
Daily Insights
US Defensives Are Gaining Ground
The S&P 500 is broadly unchanged from where it was at the end of Q1. It ended the day on Wednesday 0.5% below its level on the last day of March. However, the calm surface conceals some subterranean activity. Specifically, a selloff across cyclical…
Daily Insights
The Fed Must Avoid The Mistakes Of 1970, 1974, And 1980

As the Fed meets today, we explain what it did wrong in 1970, 1974, and 1980 that prevented inflation from being exorcised, and the lessons for 2023-24. Plus, we identify a currency cross that could rebound in the next year.

Counterpoint by Dhaval Joshi
JOLTS Signals Cooling US Labor Market
The JOLTS survey for March showed a continued softening of the US labor market. Job openings fell from 9.97 million to 9.59 million – below expectations of a more muted decline to 9.74 million. While job openings remain historically elevated, the March update…
Daily Insights
First Republic Is Gone, But Bank Concerns Remain
First Republic (FRC) became the third large-cap bank to fold when regulators seized it over the weekend. Investors took the news in stride on Monday, but several large- and mid-cap regional banks sold off sharply on Tuesday. Our US Investment Strategy…
Daily Insights

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