Andrew Balls, CIO Global Fixed Income, discusses prospects for growth and inflation in China, Russia, Brazil, India and Mexico.
The Fed statement did the minimum in acknowledging the reality of the data flow since December and revived language from September (absent in December) that “global developments” are again on the radar screen.
It is important to maintain some level of calm and a longer-term perspective to differentiate true fundamental signals from financial market noise. That sense of perspective helps us assess the events creating the dislocations and identify possible circuit breakers.
It won’t be realized inflation that derails a Fed hike in March.
The bearish narrative that pushed oil prices below $30 a barrel on Friday is compelling, but three anomalies in the data suggest the outlook may be much less bleak than meets the eye.
For fixed income portfolios, our expectation that the Fed will move more than markets are priced for has a number of broad investment implications.
Investors wanting to see bipartisan, fiscally expansionary bills out of Congress, like those passed at the end of 2015, will have to wait: The election cycle will dominate Washington with lawmakers taking a “do no harm” approach in 2016.
The minutes of the decisive 16 December Federal Open Market Committee (FOMC) meeting provide some nuance and color to complement the committee’s statement and Fed Chair Janet Yellen’s press conference…