Zach Pandl is a senior interest rate strategist for Columbia Management Investment Advisers, LLC, 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.
Heightened uncertainty around quantitative easing is mostly a short run problem. We see roughly flat odds of 20% for tapering at each of the next four meetings—December, January, March and April—and an additional 20% chance that the current QE pace continues beyond that. We have turned modestly more cautious about interest rate risk in our
Labor market issues have long taken a central role in Janet Yellen’s career. Remarks indicate Yellen views current labor market challenges as potentially very costly for the economy, and she sees a role for monetary policy in promoting recovery. Yellen’s nomination likely raises the bar for Fed tightening, as long as inflation remains low. When
President Obama to nominate Janet Yellen for Fed Chair. Yellen has strongly supported the Fed’s unconventional easing measures in recent years, and we expect that her nomination will therefore be interpreted as favorable to duration and carry trades. Yellen has described an “optimal control” framework, which could indicate a coming revision to the current structure
The outlook for quantitative easing remains difficult to gauge. We see decent odds that tapering begins in the not-too-distant future—primarily because we expect firm growth. If Fed officials were to revise their views on the costs and/or efficacy of QE, they may attempt to lean harder on the forward guidance tool. Last week the debate
Recent comments from the Fed have provided relatively little information about future QE tapering decisions. Officials have expressed contradictory views on several major policy concerns, including the state of the labor market. If economic growth continues over the next few months, tapering may commence in December. Following their surprising decision to maintain the current pace
According to our proprietary measure of U.S. activity, underlying growth was 3.4% in August after 2.2% in July (July was revised down from the preliminary estimate of 2.5% due to revisions in the payroll report). The three-month average of monthly growth rates edged up to 2.6% from 2.2% last month. As many of you know,
In our view, gross domestic product (GDP) data are deeply flawed. To form a more accurate assessment of the economy, investors should include other measurements, such as gross domestic income. Official GDP growth was relatively soft in the first half of this year, but the broader set of activity data suggests the U.S. economy is
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