Zach Pandl is a portfolio manager and strategist for Columbia Management, based in Minneapolis. Mr. Pandl focuses on research relating to the macroeconomy and government policy and their implications for interest rate markets. He chairs the Columbia Management Interest Rate Committee, which is responsible for formulating and articulating the firm’s view on interest rates in the U.S. and other developed markets. Mr. Pandl joined the firm in 2012 and has been a member of the investment community since 2006.
Prior to joining Columbia Management, Mr. Pandl was senior economist at Goldman, Sachs & Co. in New York. There he was responsible for original research on the U.S. economy and interest rates and the development of proprietary analytical tools. Previously, he held positions at Nomura Securities and Lehman Brothers.
Mr. Pandl earned his B.S. in economics from the University of St. Thomas and his Masters in economics from New York University.
The U.S. Treasury market as a whole has returned +1% annualized since the end of 2012 (and +0.5% annualized since the low in 10-year yields in July 2012). Because of imminent Fed rate hikes and depressed yield levels, prospective returns look no better today. We recommend investors take profit in long-duration fixed-income sectors that benefited
Last week’s news suggests that the center of the FOMC continues to see interest rate hikes in the middle of next year as most appropriate. December 17 looks like a natural time to begin signaling the possibility of rate hikes to financial markets—an eventuality for which bond investors do not look prepared. There are risks
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
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
In a highly indebted economy, there is no fixed cap on the level of interest rates. Any increase in interest rates must be consistent with tolerable debt service ratios, the existing stock of debt and private sector savings. It’s in this context where Fed officials’ delicate approach to the exit process looks most understandable. The
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
ECB action this week maybe not enough to restore confidence by itself, but it signals a readiness to defend the inflation target, thus lowering odds of Japanification. U.S. growth accelerating into September 16-17 FOMC meeting. Look for another cut to bond purchases and more clues on the exit game plan. In typical fashion, last week’s
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