Recession-Hard/Soft Landing
The US Employment report came in well above consensus expectations on Friday, delivering a strong positive signal on labor market conditions in January. The 353 thousand increase in nonfarm payroll employment beat expectations of a slowdown to 185 thousand.…
After falling throughout most of the second half of 2023, the US economic surprise index has surged over the past few weeks, indicating that economic conditions are firm at the start of the year. Indeed, Manufacturing PMIs delivered a positive signal last…
In this Insight our Equity Analyzer team explores how the S&P 500 behaves when the Fed Funds Target Rate drops by 25bps – 150bps within a single year. The current dot plot is signaling 75bps of cuts by the end of the year, the mid-point of the range.…
Our thoughts on bond positioning following this morning’s employment data.
Given the huge disparities in wage inflation between the US, euro area and UK, it is remarkable that the markets are pricing near-identical rate cuts from the Fed, ECB, and BoE of around 150 bps through 2024. Assuming central banks don’t behave recklessly –…
As expected, the Bank of England voted to keep its bank rate unchanged at 5.25% on Thursday – maintaining policy on hold for the fourth consecutive meeting. Two of the nine MPC members voted in favor of a 25bps rise (one less than in December) while one…
In this Insight, we share our thoughts on yesterday’s FOMC meeting and the Fed’s likely next moves, with implications for US bond strategy.
When will the US also buckle under high rates? We expect a US recession to begin around mid-year. Stay defensive.
As expected, the Fed decided to keep policy unchanged at the conclusion of the FOMC meeting on Wednesday. The changes to the Fed Statement generally indicate that the central bank is preparing to move towards easing monetary policy. Specifically, the…
The strong H2/2023 rally in global credit markets can be attributed to lower global inflation and the associated reduction in global interest rate volatility. However, our colleagues at BCA Research’s Global Fixed Income Strategy service argue that credit…