Search results for: fed funds rate

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Challenges facing government money market funds

Investors with no risk tolerance or who need stable $1 NAV will likely gravitate towards government money market funds. Such funds may provide peace of mind and liquidity, but will be challenged to offer a competitive yield.

Tagged with: Global Perspectives, Investing

Data dependence, broadly defined – Implications of last week’s Fed meeting

Last week’s FOMC meeting was the third largest dovish surprise in the QE era, only bested by the original QE1 announcement and the September 2013 “no taper” decision. We continue to expect the FOMC to hike rates in September, and the pace of rate hikes thereafter should be faster than markets are currently pricing.

Tagged with: Economy, Global Perspectives, Investing

U.S. rates — Data dependence

Evidence of data dependency at the June FOMC meeting suggests policy will respond to unemployment and inflation surprises. We are more confident the Fed’s reaction function is (nearly) done moving.

Tagged with: Economy, Fixed Income, Investing, U.S. Economy

A creature is stirring

Last week’s news suggests that the center of the FOMC continues to see interest rate hikes in the middle of next year as most appropriate. December 17 looks like a natural time to begin signaling the possibility of rate hikes to financial markets—an eventuality for which bond investors do not look prepared.

Tagged with: Economy, Fixed Income

U.S. rates — An intriguing six point three

Fed and consensus unemployment forecasts are likely to come down after last week’s jobs report. It is not obvious what lower unemployment rate forecasts mean for U.S. monetary policy.

Tagged with: Fixed Income, Investing

Slack and inflation

Today’s low unemployment rate indicates modest slack in labor market, which implies earlier Fed rate hikes and/or more inflation risk. The decline in labor force participation in recent years now looks mostly structural.

| Tagged with: Economy, Fixed Income, Investing

U.S. Rates — The Draghi Floor

ECB action this week maybe not enough to restore confidence by itself, but it signals a readiness to defend the inflation target, thus lowering odds of Japanification. U.S. growth accelerating into September 16-17 FOMC meeting.

Tagged with: Economy, Fixed Income

QE worked, but not as advertised

While QE proved very effective in reinforcing the Fed’s communication about short-term interest rates, there could be simpler ways to achieve the same outcome. The U.S. experience with QE suggests it would be effective in Europe.

Tagged with: Economy, Fixed Income, Investing
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Columbia Threadneedle Investments is a leading global asset management group that provides a broad range of actively managed investment strategies and solutions for individual, institutional and corporate clients around the world. With more than 2,000 people, including over 450 investment professionals based in North America, Europe and Asia, we manage $506 billion†† of assets across developed and emerging market equities, fixed income, asset allocation solutions and alternatives.

††In U.S. dollars as of March 31, 2015. Source: Ameriprise Q1 Earnings Release. Includes all assets managed by entities in the Columbia and Threadneedle groups of companies. Contact us for more current data.