Highlights Chart 1Keep A Close Eye On Financial Conditions  The market's rate hike expectations moved sharply higher during the past two weeks as a string of Fed speeches, including one by Chair Yellen, all but confirmed a March…

Highlights Monetary Policy: Investors should fade the recent increase in expectations of a March rate hike. Still-low inflation and elevated policy uncertainty will keep the Fed on hold until June. Continue to position for a bear-…

Highlights Rate Volatility: Forecast disagreement about GDP growth and T-bill rates will increase over the course of the year. This, alongside elevated policy uncertainty, will translate into higher interest rate volatility. Treasury…

Highlights Chart 1Strong Growth & An Easy Fed  More than a month has passed since the Fed's latest rate hike and, at least so far, the economy is displaying no ill effects. While the economic data continue to surprise…

Highlights Inflation: Inflation will trend higher this year, but at a measured pace. The impact of a tight labor market and accelerating wage growth will be mitigated by deflating import prices. Even if the economic recovery remains on…

Highlights Chart 1Upside Risks & Uncertainty  The evidence of economic acceleration continues to pile up and we maintain our view that bond yields will be higher than current forwards by the end of 2017. In the near-term,…

Special Report

Highlights Dear Clients, The holiday season is upon us, a time that is always filled with traditions. This week, we are starting a tradition of our own with this new "year-ahead" outlook report, focusing on the big ideas and…

Highlights Global Duration: Global bond yields, pushed higher since July on the back of improving global growth and rising inflation, have now overshot to the upside on excessive expectations of U.S. fiscal stimulus. Take profits on…

Highlights Chart 1More Upside From Inflation  We moved to below benchmark duration on July 19, when the 10-year Treasury yield was 1.56%. As of last Friday's close, the 10-year Treasury yield was 2.4% and above the fair value…

Highlights Portfolio Strategy The rise in Treasury yields is approaching a threshold that has often caused equity market indigestion. Stay focused on current monetary conditions rather than fiscal unknowns. The bear market in lodging…