We believe true value comes only by understanding how the market fundamentals of supply and demand affect whole sectors or sub-sectors within a portfolio. This guiding principle is how we have become one of the largest providers of financial analysis and reporting services, distributing information, opinions, and strategic commentary on a multitude of topics—practically by the minute.
– January 29, 2016
Chief Economist Chris Low
Economist Jay Morelock
Weak Growth in Q4, but Is It Weak Enough to
Stop the Fed?
This morning, we found
out Q4 GDP growth slowed to 0.7%. The Dow rallied almost 300 points in
response, a sign investors are convinced the Fed can be shocked into taking a
break from an ill-conceived plan to normalize rates. FOMC
members certainly should be taken aback. In December, several were bursting
with pride at the strength of consumption.
The Big Buyer Remains
There is $1 trillion of Treasury debt maturing
on the Federal Reserve’s balance sheet from 2016-2019. Fed officials have
signaled they will continue to reinvest the proceeds until short-term rates are
comfortably above the zero bound. With markets discounting the pace of hikes
relative to Fed forecasts, when the Fed actually...click here to read more.
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