Trending with Institutional Investors
Global Macro
The articles on this page reveal the topics that are receiving the most traffic from investors inside RFPnetworksTerminal, within one sub-asset class.
Each article summarises the key themes that investors are researching based on their engagement with content and or their search queries for that topic. These can be early signals of portfolio changes or new searches.
The Great Debate About The FED Being Behind The Curve
Fast, Faster, Fastest Rates
Only the FED seems to believe that it is not behind the curve. But the latest macroeconomic statistics suggest they should raise rates faster.
With the FED's official objectives of both price stability and maximum employment, the latest round of macro data has economists questioning FED rhetoric.
On the one side, US March 2022 headline inflation came in at 8.5%, whilst unemployment is projected to reach 3% by year end, a level not seen since the 1950's.
So should the FED be raising rates faster? And if so, why aren't they?
Global Macro
We see danger ahead. Markets are still too high, and protection is expensive in an increasingly nervous world; common sense suggests one should invest conservatively, and in safe assets. In a world where people find themselves without the ability to pay commitments as they arise, forced selling drives prices. Among risky assets like equities, one of the counter-intuitive things in a liquidity crisis is that securities perceived as safest and most liquid go down sharply, because investors are forced to sell what they can, not what they want to. We therefore regard plentiful liquidity in the portfolio as overwhelmingly attractive; it allows us to make the most of the opportunities that arise in the aftermath of a crisis. But first we have to get through the storm.
The thought that central bankers can do much to change the broad sweep of inflation is, in my view, far-fetched. Lowering interest rates and keeping them down ensured that, in the aftermath of the 2008 crash, the world escaped a dislocative deflationary recession, and experienced instead a reprieve from deflation. Their actions, however, had an inevitable consequence: the onset of a virulent inflation. This was perfectly predictable at the time, and, indeed, we predicted it.
There was, however, no money to be made from the insight that money had lost stability post-2008 – the car would swerve maybe towards deflation, maybe towards inflation, but the final result would certainly be inflationary, because the authorities’ obsession was (and is) to avoid deflation. The game changer was to be rightly prepared for inflation, and for the last ten years, we have been. To call it too early is, in our book, to call it on time.
GO DEEPER WIDER FASTER
RFPnetworksTerminal
For Manager Selectors
Bigger Data. Smarter Tools. Find the Best.
