Research & News
Weekly Geopolitical Report – Reflections on Trade: Part I (May 1, 2017)
by Bill O’Grady Donald Trump ran on a platform opposing free trade. Although Congressional support for free trade has been waning for some time, the general consensus among economists is that free trade makes the economy more efficient and supports global stability. However, the steady erosion of manufacturing jobs in the U.S. and the shrinking of… Read More »
Daily Comment (May 1, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] It’s May Day, the international labor day. As noted above, a large number of financial markets are closed today, including China and most European markets. Direct news flow is less than normal due to the closed markets. Here are the items of note: See… Read More »
Asset Allocation Weekly (April 28, 2017)
by Asset Allocation Committee Last week, we discussed the impact of reducing the size of the Federal Reserve’s balance sheet on stocks and bonds. This week we will discuss the effects of QE on monetary policy. The FOMC dropped rates to near zero by January 2009. Although European central banks (including the ECB) have since taken… Read More »
Daily Comment (April 28, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] Markets were fairly quiet overnight. The biggest mover was the EUR, which rose after Eurozone CPI came in at 1.9%, a bit higher than forecast. The financial markets are starting to discount a reduction in stimulus from the ECB, although Draghi’s comments yesterday suggest… Read More »
Daily Comment (April 27, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] ECB President Draghi is speaking at the time of this writing. Nothing has changed in terms of policy, but Draghi’s assessment of the economy is somewhat supportive, although still rather cautious. Initially, forex markets took his comments as modestly dollar bearish. However, in the… Read More »
Daily Comment (April 26, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] At 1:30 EDT, the White House is scheduled to release its tax proposal. There is quite a bit of speculation about what we will get from this announcement. Current “leaks” suggest a 15% tax rate for corporate taxes, including owner-operated firms, and a reduced… Read More »
Keller Quarterly (April 2017)
Letter to Investors Perhaps you’ve heard it or felt it, but fear of financial market decline has become palpable among the public. It’s not just fear as reflected by TV shows or internet social media I’m talking about, but fear reflected by real people in conversation. I travel rather extensively, speaking to both advisors and… Read More »
Daily Comment (April 25, 2017)
by Bill O’Grady, Kaisa Stucke, and Thomas Wash [Posted: 9:30 AM EDT] We are seeing some follow through from yesterday’s French election rally, although the magnitude is understandably less. The financial markets appear comfortable that Macron will win in the runoff, and with good reason. It would be a real shocker to see Le Pen overcome… Read More »
Weekly Geopolitical Report – Between a Rock and a Hard Place: The Gibraltar Dilemma (April 24, 2017)
by Thomas Wash Days after Theresa May triggered Article 50 of the Lisbon Treaty, Brussels issued a nine-page document outlining its guidelines for Brexit negotiations. One of the guidelines gave Spain the authority to veto any deal between Gibraltar and the European Union (EU). The U.K. is currently recognized as holding sovereignty over Gibraltar and thus… Read More »
Asset Allocation Quarterly (Second Quarter 2017)
The economy continues on a stable path, along with relatively low levels of inflation. In this cycle, tighter Fed policy involves not only raising short-term rates, but also reducing the size of the Fed’s balance sheet. The magnitude of growth of the Fed’s balance sheet in recent years was unprecedented. Its reduction is also unprecedented.… Read More »