Entries filed under 'Interest Rates'

    Will a Fed Hike Spell Trouble for the Yield Curve?

    December 14, 2015 10:47 AM by Timothy Paulson

    The central bank likely will raise rates at its December meeting. But the move may not play out in the markets the way investors think.

    With markets finally pricing in an imminent rate hike by the U.S. Federal Reserve (Fed), it is time to focus on what may come afterward. 

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    The Fed: October Jobs Report Starts Countdown to "Liftoff"

    November 6, 2015 1:25 PM by Zane Brown

    Strong growth in nonfarm payrolls, and an uptick in hourly earnings, increases the odds of a December rate hike. 

    Will we have “liftoff” at last? The 271,000 monthly gain in nonfarm payrolls in the U.S. employment report for October, released Friday, November 6 by the U.S. Bureau of Labor Statistics, boosts the likelihood of a rate hike by the U.S. Federal Reserve (Fed) at its December policy meeting. 

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    Did the Fed Just Put a December Rate Hike on the Calendar?

    October 28, 2015 4:30 PM by Zane Brown

    A change in language in the U.S. Federal Reserve's October policy statement may signal a greater probability of a December tightening. 

    The U.S. Federal Reserve (Fed) sent financial markets a “save the date” card on October 28. The date in question is December 15–16, when the Federal Open Market Committee (FOMC), the Fed’s policy-setting arm, will hold its next  policy meeting. 

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    Labor Surprise

    October 2, 2015 5:45 PM by Zane Brown

    September’s disappointing jobs report stifles expectations of a Federal Reserve rate hike this year. 

    The September jobs report was both disappointing and alarming to many investors. Expectations were for another month of 200,000 or more new jobs, with confidence that the weak August report would be adjusted higher. Neither expectation was met, however.

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    The Fed: Are Yellen and Markets on the Same Page?

    September 25, 2015 4:04 PM by Zane Brown

    The U.S. Federal Reserve chair attempted to clarify the central bank’s policy stance on September 24. Investors appear far from convinced. 

    In an academic speech at the University of Massachusetts, on September 24, U.S. Federal Reserve (Fed) chairwoman Janet Yellen did her best to provide clarity on the direction of Fed policy. The fine-tuning came one week after a communiqué from the Fed’s policy-setting arm, the Federal Open Market Committee (FOMC), on September 17—and a subsequent press conference from Yellen—that left investors dazed and confused.

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    The Fed Scrubs a September "Liftoff"

    September 17, 2015 3:38 PM by Zane Brown

    Besides leaving the fed funds rate unchanged, the U.S. central bank also signaled a measured pace to future interest-rate hikes. 

    The long-awaited rate increase—“liftoff”— will have to wait at least another month. Although low unemployment (5.1%) and improving labor conditions provided justification for the U.S. Federal Reserve (Fed) to raise rates, the central bank’s policy-setting arm, the Federal Open Market Committee (FOMC), opted to delay taking the first step to policy normalization at the conclusion of its policy meeting on September 16–17.  

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    For the Fed, a 1/8% Solution

    September 11, 2015 1:15 PM by Zane Brown

    By starting small, the U.S. Federal Reserve could initiate interest-rate hikes without sparking market volatility.

    The U.S. Federal Reserve (Fed) needs to replenish its policy ammunition. To achieve that, it will have to raise the fed funds rate from its current near-zero level. Such a move will help the central bank restore its traditional policy approach of adjusting the benchmark interest rate to help speed up, or slow down, U.S. economic growth, while ensuring that price stability and employment growth are maintained.

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    Fixed Income: The 2015 Halftime Report

    July 17, 2015 12:40 PM by Robert Lee

    Robert Lee, Lord Abbett Partner & Director, discusses the outlook for the economy, the U.S. Federal Reserve, inflation, and interest rates.

    The second half of 2015 is here, and with it come a number of pressing questions for fixed-income investors. My colleague Andrew O’Brien and I held a web conference with financial advisors on July 16 to share our views on the current market environment and what may lie ahead for the sector. I’d like to summarize some of our key points here for those who missed the conference, or for those participants who would like to share these insights with others.

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    A Pre-Fed Reality Check

    April 27, 2015 4:07 PM by Timothy Paulson

    As U.S. policymakers prepare to meet on April 28–29, here’s a status report for key asset classes.

    With U.S. Federal Reserve policymakers set to meet on April 28–29, we thought it would be a good time to take the temperature of key asset classes as the world awaits more clues about a potential “liftoff” in U.S. interest rates sometime in 2015. (In a follow-up post, we’ll look at how Lord Abbett is positioning its fixed-income portfolios in the current environment.)

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    The Fed: "Patient" Dies, Investors' Risk Appetite Lives On

    March 27, 2015 12:50 PM by Timothy Paulson

    What’s behind the surprising market reaction to the central bank’s March 18th policy statement?

    Financial markets recently were hanging on a single word from the U.S. Federal Reserve. Investors were eager to hear whether the Fed’s policy-setting arm, the Federal Open Market Committee (FOMC), would remove the word “patient”—used since December 2014 to describe the central bank’s stance toward maintaining its current zero interest-rate policy–from the statement issued at the conclusion of its two-day policy meeting on March 18, 2015. The central bank did indeed drop the word “patient” from the post-meeting communique, moving the Fed one step closer to “liftoff”—that is, the first in a potential series of interest-rate hikes.

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