Many view the Dow’s rise above 20,000 as a sign of optimism about the long-term economic growth outlook for the U.S. Yet the bond market is sending a different signal.
The decline in the jobless rate makes it very likely that the Federal Reserve will increase its policy rate next week.
Strong retail sales data provide evidence that consumer spending remains strong enough to sustain the U.S. economic expansion in the short run.
China’s integration into global financial systems is one of the biggest sources of recent volatility
For fixed income portfolios, our expectation that the Fed will move more than markets are priced for has a number of broad investment implications.
In markets, as in life, there are few guarantees, forcing investors to choose between likely outcomes. Following Friday’s strong U.S. jobs report, this means betting squarely on the Federal Reserve increasing its policy rate by 25 basis points to a target range of between 0.25% and 0.50% at its next policy meeting on 16 December.
Is this slowdown simply a break from the trend, or is this likely to become the norm for job growth in the time ahead?
The latest monthly jobs report contained some good news for the U.S. economy, with the labor market continuing to show improvement in July, likely putting the Federal Reserve on the verge of raising its policy rate for the first time since 2006.
Federal Reserve Chair Janet Yellen took to Capitol Hill Wednesday to deliver the Fed’s semiannual Monetary Policy Report to Congress, a forum that for many years infused volatility into the financial markets.
Although many observers were comforted by the market-friendly outcome of last week’s FOMC meeting, the Fed will likely aim to avoid soothing the market too much.