Perspectives Blog

What the end of QE means for investors (video)

Zach Pandl, Portfolio Manager and Strategist | November 17, 2014

Watch Zach Pandl, portfolio manager and strategist, explain what the end of the Fed’s Quantitative Easing program means for investors. QE is over because it succeeded, which is good news. With cash yields still close to zero, staying invested is critical to maintaining purchasing power. Although we still think there are opportunities in the bond market, investors should be wary about too much interest rate risk in their bond portfolios….

Are financial markets priced for secular stagnation?

Columbia Management, Investment Team | December 15, 2014

…re still deliver generous returns if global growth recovers. By Toby Nangle, Head of Multi Asset Allocation and Zach Pandl, Portfolio Manager and Strategist The idea that economies may be undergoing a long period of slow growth has been attracting an increasing amount of attention. Data shows fairly definitively that potential growth has been low for a number of years, including years preceding the global financial crisis. And so when Larry Summ…

Slack and inflation

Zach Pandl, Portfolio Manager and Strategist | July 21, 2014

…estors should remain cautious around U.S. interest rate risk despite a solid first half of 2014. Excerpted from Zach Pandl’s newest whitepaper Structural weakness in labor force participation means there is less slack in the labor market than commonly believed. Limited spare capacity in turn implies earlier rate hikes and more risk that inflation eventually overshoots the Federal Reserve’s target. In recent decades that target was “minimum unemp…

Inflation — The usual suspects

Zach Pandl, Portfolio Manager and Strategist | August 11, 2014

Four factors figure empirically into how and why inflation moves: (1) commodity prices, (2) spare capacity, (3) changes in exchange rates, and (4) monetary policy. These same factors argue for a gradual recovery in U.S. inflation in the year ahead, which could be a headwind for high-quality fixed-income returns. In contrast to U.S. markets, in markets with prospects for a trend lower in inflation expectations (e.g. certain pockets of EM), falli…

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

…rst half of 2014 and share their insights into what may be ahead for the second half of the year. Interest rates Zach Pandl, Portfolio manager and strategist Review: Government bond yields declined in early 2014, both in the U.S. and in other developed market economies. This surprising change in course after increases in 2013 caught many investors off guard. In our view, declining interest rates reflect renewed pessimism about the global economic…

Dovish feathers showing through

Zach Pandl, Portfolio Manager and Strategist | April 14, 2014

Dovish comments by Fed officials lead us to believe that normalization in interest rates could take a more circuitous route. While the steady economic recovery makes higher yields inevitable, the path we take to get there is dependent on the Yellen Fed’s policy approach. We remain underweight duration, but are now less sure 3-5yr yields will lead the way over the near-term. Textbooks would have us believe that monetary policy is a hard science…

U.S. rates — View update

Zach Pandl, Portfolio Manager and Strategist | April 4, 2014

Compared to the market consensus, our views have been more negative on three key duration fundamentals. Following recent remarks by Fed Chair Janet Yellen, we are now less confident about how to read Yellen’s policy strategy. We are still expecting higher rates; however, we now have less conviction that 3-5yr Treasuries will continue to underperform on the curve. For the last couple of months we have argued that portfolios should remain underw…