Latest payroll data came in below expectations, but it will not change the Fed’s view on tapering quantitative easing sometime before year end. Disproportionate gains in part-time workers warrant higher scrutiny for a number of reasons, including implications for income and consumer spending. Payroll data supports the view that the economy seems stuck near 2% real growth
Going forward, investors should look for return opportunities that do not depend upon easy money. Diversification strategies must take into account expected high correlations and the vulnerability of “safe” assets to changes in monetary policy The repricing of many assets as the second quarter drew to a close has created an expanded set of attractive
Fed policy outlook looks increasingly fluid, including changes in the consensus on the leading candidate for next Fed Chair. There has been increasing speculation around changes to the so-called “Evans Rule”—the Fed’s commitment to keep short-term interest rates low as long as the unemployment rate remains above 6.5%. For the upcoming FOMC meeting, we think
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