Portfolio Manager Commentary

  • Overview, strategy, and outlook: As of May 31, 2018 The Federal Reserve (Fed) releases its meeting minutes on the Wednesday three weeks after the meeting’s conclusion. It’s usually a sleepy affair, with bond market strategists reading tea leaves by weighing the input of a few committee members against opinions held by several, which are usually eclipsed by those agreed upon by many.
  • Overview, strategy, and outlook: As of April 30, 2018 The end of April seems to serve as an inflexion point of sorts for the money markets. Experience has shown that it represents a turning point at which seasonal outflows from money market funds stop, or at least stabilize, followed by a gradual buildup in assets in the second half of the year, accelerating into year-end.
  • Overview, strategy, and outlook: As of March 31, 2018 While the peaceful transition of power at the Federal Reserve (Fed) occurred on February 1, late February and early March gave the markets the first taste of policy under new Fed Chair Jerome Powell.
  • Overview, strategy, and outlook: As of February 28, 2018 The Structured Finance Industry Group held its 2018 conference in Las Vegas from February 25–28. While modest relative to other industry conventions, with well over 7,000 attendees the event remains the largest structured finance conference in the world, drawing professionals from rating agencies, issuers, dealers, the investing and legal communities, and other participants in the structured finance marketplace.
  • Overview, strategy, and outlook: As of January 31, 2018 Like the horror-film villain that just won’t die, the debt ceiling continues to be an issue in the money markets. Its current incarnation comes with an odd mix of unusual uncertainty regarding cash-flow timing and, conversely, perhaps more clarity politically.
  • Tax Reform—Overseas Cash and Repatriation Implications Prior to 2018, the United States’ relatively high corporate tax rate incented many domestic companies with international operations to locate foreign subsidiaries in tax-haven countries and delay U.S. tax payments.
  • Overview, strategy, and outlook: As of December 31, 2017 In the money markets, two themes seem to persist and never go away, and last year proved no different from previous years. We were able to break out of that cycle with only 2 of our 10 commentaries this year by producing focus pieces unrelated to those issues.
  • Overview, strategy, and outlook: As of November 30, 2017 When we last met, the House was teetering on the brink of approving a tax reform package, which it passed shortly after the month began.
  • Overview, strategy, and outlook: As of October 31, 2017 October seemed like a relatively quiet month: Nothing happened to roil financial markets and, if you factored out tweets and the inevitable responses, Washington actually seemed functional, at least until the end of the month. In a surprising and largely unheralded development, Congress passed a budget resolution!
  • Overview, strategy, and outlook: As of September 30, 2017 During the eventful month of September, the market’s focus shifted from a debt-ceiling obsession to a Federal Reserve (Fed) hiking cycle rising from the ashes. Each week had its moment, beginning with a debt-ceiling deal on September 6, just two working days after the Labor Day holiday and, perhaps more importantly, Congress’ long summer break.
  • Frequently asked questions: The debt ceiling With the passage of Labor Day, Congress and the markets will be back at work, bringing the looming debt-ceiling crisis into increasing prominence.
  • Overview, strategy, and outlook: As of June 30, 2017 June was a fairly active month in money market land, with two events seemingly capturing the attention of most inhabitants. First, the Federal Open Market Committee (FOMC) met on June 14 and 15 and, in a move that surprised no one, raised the federal funds target range by 25 basis points (bps; 100 bps equal 1.00%). Federal Reserve (Fed) Chair Janet Yellen held a press conference at which she reiterated the Fed’s commitment to normalizing interest rates as economic conditions warranted. Second, the Fed released an addendum to its usual postmeeting statement that outlined the methods and timing of its program to shrink the size of its balance sheet; the unusual nature of the release—that is, a document separate from and distributed between the scheduled release of its meeting minutes—suggests that the timing of “this year” to begin reducing reinvestments may occur sooner than the end of the year.
  • Overview, strategy, and outlook: As of May 31, 2017 The main topic in the government space continues to be the Federal Reserve (Fed), including its potential interest-rate path and balance sheet changes.
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