Highlights Corporate Bonds & Inflation: The perception of accommodative monetary policy is the sole support for corporate bond performance. But this support will fade as inflationary pressures mount. Our first trigger to reduce…
Highlights Chart 1Bond Bear On Pause? The start of a new year often brings optimism and nowhere is this more evident than in economic projections. In three of the past four years (2017 being the exception) Bloomberg consensus…
Highlights Chart 12017 Bond Returns Treasuries sold off for the third consecutive month in November (Chart 1), and with Congress about to deliver tax cuts and core inflation showing signs of bottoming, the bond bear market is…
Highlights Chart 1Fed Must Fall Behind The Curve Jerome Powell will assume the Fed Chairmanship at a critical juncture for monetary policy. Core PCE inflation is still well below the Fed's 2% target, and yet, the slope of…
Highlights Year One Performance: The GFIS recommended model bond portfolio returned 1.1% (hedged into USD) in its first year of existence, slightly underperforming the custom benchmark index by -2bps. Our bearish duration tilts were…
Highlights Duration: The global economic recovery is more synchronized than at any time since 2011. This suggests that foreign demand will be less of an impediment to the bond bear market and that Treasury yields will rise once U.S.…
Highlights Chart 1Tax Reform Is A Bear-Steepener The federal government provided some details about its tax reform proposal last week. Markets reacted immediately, once again starting to price-in the possibility of lower tax…
Highlights Beige Book highlights disconnect between inflation words and inflation data. Peak in auto sales is not a harbinger of recession. Capital spending still trending higher. Inflation and inflation surprise will need to move…
Highlights Chart 1"Trump Trade" Progress Report One of our seven investment themes for 2017, published in a Special Report last December, is that the combination of strong U.S. growth and accommodative Fed policy creates…