Asset Allocation Reports
Asset Allocation Bi-Weekly – The Fed’s Employment Surprise (April 24, 2023)
by the Asset Allocation Committee | PDF This is the tightest labor market for Black Americans in U.S. history. The Black unemployment rate fell to an all-time low in March unsurpassed since the Bureau of Labor Statistics began a separate calculation for Black workers in 1972. Meanwhile, the labor force participation rate for Black Americans… Read More »
Asset Allocation Bi-Weekly – Increasing Concerns About Commercial Real Estate (April 10, 2023)
by the Asset Allocation Committee | PDF Last month’s failure of Silicon Valley Bank (SIVB, $106.04) showed that the institution had vulnerabilities in both its assets and its liabilities. On the asset side of its balance sheet, the bank had too much exposure to longer-maturity government bonds, which depreciated sharply as the Federal Reserve aggressively… Read More »
Asset Allocation Bi-Weekly – Have Policymakers Solved the Tinbergen Problem? (March 27, 2023)
by the Asset Allocation Committee | PDF Central banking was initially created to address commercial bank runs. Commercial banks engage in a liquidity transformation, where they accept deposits, which are mostly available on demand, and turn that liquidity into less-liquid assets, usually loans or securities. Bank revenue comes from capturing this liquidity premium as less-liquid… Read More »
Asset Allocation Bi-Weekly – The Importance of the Policy Mix (March 13, 2023)
by the Asset Allocation Committee | PDF Based on the strong U.S. economic data so far this year, investors have again become worried that the Federal Reserve will continue to hike interest rates aggressively and keep them high for a prolonged period. We agree that is a significant risk, and the rate hikes to date… Read More »