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Insights and research on global events shaping the markets

At its recent FOMC meeting, the Federal Reserve reaffirmed its stance, signaling three rate cuts in 2024, aligning with its December 2023 projections. The Fed also adjusted its longer-term outlook, projecting fewer rate cuts for 2025 and 2026. Meanwhile, the Swiss National Bank made an unexpected move by cutting rates, and the Bank of England conveyed a dovish stance while holding rates steady.

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24/03/2024

Recent U.S. inflation figures, embodying both the CPI and PPI, underscore persistent uncertainties, highlighting that the journey to stabilize inflation is far from over. These developments advocate for a prudent stance from the Federal Reserve, emphasizing the necessity of patience before contemplating any policy easing in the face of the "last smile" of disinflation.

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17/03/2024

Kicking off March, the fixed income markets have experienced a robust rally, marked by a 1.2% surge across global bonds. This rebound aligns with a notable decline in the Citi US Economic Surprise Index and the most significant weekly inflows into global bonds since January 2023, heralding a potentially optimistic phase for bond investors.

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08/03/2024

In 2024, the credit market has notably outperformed rates, highlighting a period of resilience and investor favor towards corporate bonds. Yet, with spreads tightening to historic lows and a complex economic backdrop, we ponder the sustainability of this outperformance. How long can credit maintain its edge in the face of potential rate adjustments and economic uncertainties?

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01/03/2024

Market forecasts and the Federal Reserve's perspective on interest rate cuts have harmonized. This synchronization between market sentiments and the Fed's intentions underscores a shift towards a more balanced risk landscape for fixed income investments.

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25/02/2024

The fixed income market is currently grappling with the concept of the "Last Smile," a term coined by Isabel Schnabel to encapsulate the intricacies encountered during the last stages of disinflation. Recent adverse movements in January's inflation and Producer Price Index (PPI) data have underscored the challenges of this phase, affecting market sentiment and dynamics.

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16/02/2024

Recent macroeconomic data have led American and European central bankers to moderate their earlier optimistic projections, impacting bond markets. This recalibration, reflecting ongoing economic resilience, has prompted a reassessment of interest rate paths, contributing to heightened volatility and shifts in global fixed income landscapes.

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09/02/2024

Following the FOMC meeting, Fed Chair Powell signaled the Fed's reluctance to cut rates in March, emphasizing the need for additional "confidence" in declining inflation figures. This careful stance reflects the ongoing robustness of the American job market, suggesting that a methodical approach is currently favored.

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02/02/2024

This week's Fixed Income Weekly hones in on the ECB's steady policy with a slight nod towards future rate cuts and solid U.S. economic data, leading to a pronounced steepening in yield curves. These developments are fueled by declining inflation, underlining the resilience of economic trends in a shifting inflationary landscape.

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26/01/2024

This week, central banks globally face the intricate task of balancing market anticipations with their policy decisions, as they address the aggressive expectations for rate cuts amidst evolving economic landscapes.

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19/01/2024

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