Federal Reserve Chairman Jerome Powell made a well-directed and much-needed statement on Friday, maintaining the possibility of a cut by the central bank in interest rates, in an attempt to take back control of the narrative on the Fed's response to the coronavirus outbreak. Powell's remarks, ... READ MORE >
coronavirus
Negative yields increase as global coronavirus risk proliferates
One of the major narratives inside the global fixed income market over the past year was the rise of negative-yielding debt, which peaked at $17 trillion during the most intense phase of the U.S.-China trade conflict in August 2019. As fears of a wider trade conflict abated, the issuance of global ... READ MORE >
Canary in a coal mine: What money market spreads tell us about risk
Money market spreads offer a real-time insight into the amount of risk being priced into interest-rate transactions and can provide real-time metrics of larger financial and economic challenges. The upset in financial markets over the past two days has caused a move in sensitive risk spreads ... READ MORE >
How the Fed responds to economic downturns
Since the 1970s, the Federal Reserve has relied on manipulating expectations of short-term interest rates through cuts in its overnight policy rate in response to economic and manufacturing slowdowns. Reducing interest rates is thought to facilitate investment, which is necessary for economic growth and ... READ MORE >
As coronavirus spreads, what are the fiscal and monetary policy options?
Investors over the past few days have priced in three 25 basis-point cuts in the federal funds rate by the end of the year, with the first cut implied by the markets coming in June. This is somewhat misguided, given the nature of the global public health emergency that is the catalyst for the change in ... READ MORE >
Seaports grow quiet amid trade tensions and the coronavirus outbreak
On a recent trip to Seattle, I noticed a lack of commercial activity in the port and an absence of containers compared to the bustling business of the recent past. This anecdotal evidence of declining trade activity prompted us to take a closer look at the Los Angeles/Long Beach port, which is one of the ... READ MORE >
U.S. GDP grew an estimated 1.5% in January; household consumption expected to be strongest segment in Q1
The United States’ gross domestic product grew an estimated 1.5% in January, according to RSM’s Monthly Index of Economic Activity. That bump followed GDP growth of 2.3% in the fourth quarter of 2019. We forecast a 1% GDP growth rate with downside risk for the first quarter of the year, with household ... READ MORE >
For apparel industry, optimism over China trade deal gives way to concerns over virus outbreak
When middle market fashion and apparel leaders weighed moving production from China after the onset of tariffs in the second half of 2019, a global virus outbreak probably wasn’t part of the equation. Nonetheless, companies that elected to keep sourcing from China are faced with a new wave of ... READ MORE >
Monitoring financial risk during pandemics
Global market participants have priced in the imminent reopening of the Chinese economy, while the World Health Organization has cautioned that it is too early to declare that the virus is at its peak. It is clear based on news flow over the weekend and into Monday's early-morning session that it ... READ MORE >
Coronavirus epidemic threatens technology global supply chain
Coronavirus deaths continue to rise Recently, we’ve seen significant volatility within the global market as investors continue to weigh the overall impact of the coronavirus (2019-nCoV). While a vaccine from drugmaker Gilead Sciences Inc. brings a glimmer of hope in finding a cure, the virus ... READ MORE >