Estados Unidos

Biden’s State of the Union address will mostly be blocked by a gridlocked Congress. The one point of agreement, big spending, spells trouble over the long run, even if a technical default is avoided this fall.

The Fed is betting that the usual non-linearity of unemployment is different this time, but so far, there is nothing to suggest that it is different. We discuss the key signposts to watch out for, plus the implications for interest rates and asset allocation.

This is the first of two Special Reports aiming to answer client questions in response to the recent dramatic changes in stock-bond correlations. In this report we focus on what role US Treasurys have played since 1872, how the current regime shift in stock-bond correlation compares to 150-years of history, and how it will impact asset allocation going forward.