Trouble with the Curve?
Forecasts and projections are based on current market conditions and are subject to change without notice. Projections should not be considered a guarantee.
This article may contain assumptions that are “forward-looking statements,” which are based on certain assumptions of future events. Actual events are difficult to predict and may differ from those assumed. There can be no assurance that forward-looking statements will materialize or that actual returns or results will not be materially different from those described here.
Statements concerning financial market trends are based on current market conditions, which will fluctuate. There is no guarantee that markets will perform in a similar manner under similar conditions in the future. Past performance is not a guarantee or a reliable indicator of future results.
Treasuries are debt securities issued by the U.S. government and secured by its full faith and credit. Income from Treasury securities is exempt from state and local taxes.
Yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates. One such comparison involves the two-year and 10-year U.S. Treasury debt. This yield curve is used as a benchmark for other debt in the market, such as mortgage rates or bank lending rates. The curve is also used to predict changes in economic output and growth.
The Composite Index of Leading Indicators is used to predict the direction of global economic movements in future months. The monthly index is composed of 10 economic components whose changes tend to precede changes in the overall economy.
The Bloomberg Consumer Comfort Index measures Americans' perceptions on three important variables: the state of the economy, personal finances, and whether it's a good time to buy needed goods or services. A new index reading is generated every week.
The Federal Open Market Committee (FOMC), the policy-setting arm of the U.S. Federal Reserve, issues projections of the rate of U.S. economic growth at the conclusion of its meetings in March, June, September, and December of each year.
The Chicago Fed National Financial Conditions Index is a gauge of U.S. financial conditions. The index tracks measures of financial stress and tightness of credit markets.
The Philadelphia Fed 50-State Diffusion Index is a combination of a monthly coincident indexes prepared for each of the 50 U.S. states. The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic.
Using its GDPNow forecasting model, the Atlanta Fed’s NOWCast offers an advance projection of the official estimate of U.S. gross domestic product (GDP) prior to its quarterly release by the U.S. Bureau of Economic Analysis (BEA) by estimating GDP growth using a methodology similar to the one used by the BEA.
Indexes are unmanaged, do not reflect the deduction of fees or expenses, and are not available for direct investment.
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The opinions in this commentary are as of the date of publication, are subject to change based on subsequent developments, and may not reflect the views of the firm as a whole. The material is not intended to be relied upon as a forecast, research, or investment advice, is not a recommendation or offer to buy or sell any securities or to adopt any investment strategy, and is not intended to predict or depict the performance of any investment. Readers should not assume that investments in companies, securities, sectors, and/or markets described were or will be profitable. Investing involves risk, including possible loss of principal. This document is prepared based on the information Lord Abbett deems reliable; however, Lord Abbett does not warrant the accuracy and completeness of the information. Investors should consult with a financial advisor prior to making an investment decision.