Perspectives Blog

What to expect from Janet Yellen’s testimony

Zach Pandl, Portfolio Manager and Strategist | February 10, 2014

Yellen’s testimony before U.S. lawmakers will help clarify how she plans to govern the committee Some investors are expecting a meaningful change in direction from the Yellen Fed We look at four reasons why we anticipate continuity with the Bernanke regime After a few bewildering weeks with Nicolas Maduro and Erdem Basci, I can’t be the only one grateful to be turning attention back to Janet Yellen. The new Federal Reserve Board Chair will mak…

QE worked, but not as advertised

Zach Pandl, Portfolio Manager and Strategist | November 3, 2014

While QE proved very effective in reinforcing the Fed’s communication about short-term interest rates, there could be simpler ways to achieve the same outcome. The U.S. experience with QE suggests it would be effective in Europe. The Fed ended QE because it succeeded and that’s good news for investors. Last week the Federal Reserve announced the end of its bond-buying program, which has been running with only brief interruptions for the last s…

The beginnings of a new moderation in Asia

Soo Nam Ng, Head of Asian Equities | June 2, 2014

The Great Moderation was a period of macroeconomic growth and reduced volatility that provided a backdrop to the strong performance of U.S. equities. The lessons hold relevance for equity investors in Asia as big picture conditions for a Great Moderation are starting to fall into place. We believe the “new moderation” mindset will take Asia into its next leg of development, unleashing its potential in a more sustainable and stable manner. Less…

U.S. rates — When the facts change

Zach Pandl, Portfolio Manager and Strategist | September 10, 2014

Prospective returns for Treasuries now look poor across the curve—not just at the front end. Yield curves tend to flatten as central banks raise short-term rates, but valuations have now moved beyond the point where these trades make sense. Investors should brace for higher interest rates, not just a flattening yield curve. When the facts change At the start of this year our views on U.S. interest rates were underpinned by two main facts: (1)…

U.S. rates – Waiting for the sound

Zach Pandl, Portfolio Manager and Strategist | May 5, 2014

Latest data showing faster growth and shrinking gaps. Normalizing economy creates asymmetry in monetary policy outlook. Fed officials might need to make a sound before interest rates move higher in more meaningful way. By now it is widely appreciated that gross domestic product (GDP) is a deeply flawed tool for tracking economic growth. But the contrast between the Q1 GDP report and other available data on the economy was nonetheless remarkabl…