Entries filed under 'Interest Rates'

    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.

    Read More »

    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.

    Read More »

    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.)

    Read More »

    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.

    Read More »

    The Fed: Don't Weird Out Over Normalization

    March 11, 2015 2:53 PM by Timothy Paulson

    Investors have been spooked by the prospect that the central bank will start raising interest rates. Here’s why they should stop worrying.

    The February U.S. employment report, released on March 6, continued a year-long string of monthly job growth in excess of 200,000. The fixed-income and equity markets both sold off dramatically in its aftermath, apparently fearing accelerated timing of interest-rate hikes from the U.S. Federal Reserve (Fed) in response to a strengthening labor market.

    Read More »