Image alt tag

Error!

X

There was a problem contacting the server. Please try after sometime.

Sorry, we are unable to process your request.

Error!

X

We're sorry, but the Insights and Intelligence Tool is temporarily unavailable

If this problem persists, or if you need immediate assistance, please contact Customer Service at 1-888-522-2388.

Error!

X

We're sorry, but the Literature Center checkout function is temporarily unavailable.

If this problem persists, or if you need immediate assistance, please contact Customer Service at 1-888-522-2388.

Tracked Funds

You have 0 funds on your mutual fund watch list.

Begin by selecting funds to create a personalized watch list.

(as of 12/05/2015)

Pending Orders

You have 0 items in your cart.

Subscribe and order forms, fact sheets, presentations, and other documents that can help advisers grow their business.

A verification Email Has Been Sent

Close

An email verification email has been sent to .
Follow the instructions to complete the email validation process.

I have not received my verification email

Check your SPAM mailbox and make sure that twelcome@lordabbett.com is allowed to send you mail.

I'm still having trouble

If you're still having trouble verifying your email address. feel free to contact us.

1-888-522-2388
clientservices@lordabbett.com


OK

We're sorry. We found no record of the email address you provided.

Close

Register For a LordAbbett.com Account
Using Your Email Address.

  • Registered Financial Advisors gain access to:
  • Our data mining tool, Insight & Intelligence
  • Best in-class practice management content
  • Educational events, videos and podcasts.
  • The Lord Abbett Review - Subscribe now!

Registered but Having Problems?

If you believe you are registered and are having problems verifying your email address, feel free to contact us.

1-888-522-2388 clientservices@lordabbett.com

Terms & Condition

X

These Terms of Use ("Terms of Use") are made between the undersigned user ("you") and Lord, Abbett & Co. ("we" or "us"). They become effective on the date that you electronically execute these Terms of Use ("Effective Date").

A. You are a successful financial consultant that markets securities, including the Lord Abbett Family of Funds;

B. We have developed the Lord Abbett Intelligence System (the "Intelligence System"), a state of the art information resource that we make available to a limited community of broker/dealers through the Internet at a secure Web site (the "LAIS Site"); and

C. We wish to provide access to the Intelligence System to you as an information tool responsive to the demands of your successful business pursuant to these Terms of Use. Accordingly, you and we, intending to be legally bound, hereby agree as follows:]

1. Overview. · Scope. These Terms of Use (which we may amend from time to time) govern your use of the Intelligence System. · Revisions; Changes. We may amend these Terms of Use at any time by posting amended Terms of Use ("Amended Terms of Use") on the LAIS Site. Any Amended Terms of Use will become effective immediately upon posting. Your use of the Intelligence System after any Amended Terms of Use become effective will be deemed to constitute your acceptance of those Amended Terms of Use.We may modify or discontinue the Intelligence System at any time, temporarily or permanently, with or without notice to you. Purpose of the Intelligence System. The Intelligence System is intended to be an information resource that you may use to contribute to your business research. The Intelligence System is for broker/dealer use only; it is not to be used with the public in oral, written or electronic form. The information on the Intelligence System and LAIS Site is for your information only and is neither the tax, legal or investment advice of Lord Abbett or its third-party sources nor their recommendation to purchase or sell any security.

2. Your Privileges. · Personal Use. Your use of the Intelligence System is a nontransferable privilege granted by us to you and that we may deny, suspend or revoke at any time, with or without cause or notice. · Access to and Use of the Intelligence System. The User ID and password (together, an "Access ID") issued by us to you (as subsequently changed by you from time to time) is for your exclusive access to and use of the Intelligence System. You will: (a) be responsible for the security and use of your Access ID, (b) not disclose your Access ID to anyone and (c) not permit anyone to use your Access ID. Any access or use of the Intelligence System through the use of your Access ID will be deemed to be your actions, for which you will be responsible. · Required Technology. You must provide, at your own cost and expense, the equipment and services necessary to access and use the Intelligence System. At any time, we may change the supporting technology and services necessary to use the Intelligence System. · Availability. We make no guarantee that you will be able to access the Intelligence System at any given time or that your access will be uninterrupted, error-free or free from unauthorized security breaches.

3. Rights in Data. Our use of information collected from you will be in accordance with our Privacy Policy posted on the LAIS Site. Our compliance with our Privacy Policy will survive any termination of these Terms of Use or of your use of the Intelligence System.

4. Your Conduct in the Use of the Intelligence System. You may access, search, view and store a personal copy of the information contained on the LAIS Site for your use as a broker/dealer. Any other use by you of the Intelligence System and the information contained on the LAIS Site these Terms of Use is strictly prohibited. Without limiting the preceding sentence, you will not: · Engage in or permit any reproduction, copying, translation, modification, adaptation, creation of derivative works from, distribution, transmission, transfer, republication, compilation or decompilation, reverse engineering, display, removal or deletion of the Intelligence System, any portion thereof, or any data, content or information provided by us or any of our third-party sources in any form, media or technology now existing or hereafter developed, that is not specifically authorized under these Terms of Use.

· Remove, obscure or alter any notice, disclaimer or other disclosure affixed to or contained within the Intelligence System, including any copyright notice, trademark and other proprietary rights notices and any legal notices regarding the data, content or information provided through the Intelligence System.

· Create a hyperlink to, frame or use framing techniques to enclose any information found anywhere on the LAIS Site without our express prior written consent.

· Impersonate any person, or falsely state or otherwise misrepresent his or her affiliation with any person in connection with any use of the Intelligence System.

· Breach or attempt to breach the security of the Intelligence System or any network, servers, data, or computers or other hardware relating to or used in connection with the Intelligence System; nor (b) use or distribute through the Intelligence System software or other tools or devices designed to interfere with or compromise the privacy, security or use of the Intelligence System by others or the operations or assets of any person.

· Violate any applicable law, including, without limitation, any state federal securities laws. 5. Your Representations and Warranties. You hereby represent and warrant to us, for our benefit, as of the time of these Terms of Use and for so long as you continue to use the Intelligence System, that (a) you are, and will continue to be, in compliance with these Terms of Use and any applicable laws and (b) you are authorized to provide to us the information we collect, as described in our Privacy Policy.

6. Disclaimer of Warranties.

· General Disclaimers.

THE INTELLIGENCE SYSTEM, THE LAIS SITE AND ALL DATA, INFORMATION AND CONTENT ON THE LAIS SITE ARE PROVIDED "AS IS" AND “AS AVAILABLE” AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND. WITHOUT LIMITING THE PRECEDING SENTENCE, LORD ABBETT, ITS AFFILIATES, AGENTS, THIRD-PARTY SUPPLIERS AND LICENSORS, AND THEIR RESPECTIVE EMPLOYEES, CONTRACTORS, DIRECTORS, OFFICERS AND SHAREHOLDERS (COLLECTIVELY, THE “LORD ABBETT GROUP”) EXPRESSLY DISCLAIM ALL WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NONINFRINGEMENT. YOU EXPRESSLY AGREE THAT YOUR USE OF THE LAIS SITE, THE INTELLIGENCE SYSTEM, AND THE DATA, INFORMATION AND CONTENT PRESENTED THERE ARE AT YOUR SOLE RISK AND THAT THE LORD ABBETT GROUP WILL NOT BE RESPONSIBLE FOR ANY (A) ERRORS OR INACCURACIES IN THE DATA, CONTENT AND INFORMATION ON THE LAIS SITE AND THE INTELLIGENCE SYSTEM OR (B) ANY TERMINATION, SUSPENSION, INTERRUPTION OF SERVICES, OR DELAYS IN THE OPERATION OF THE LAIS SITE OR THE INTELLIGENCE SYSTEM.

· Disclaimer Regarding Investment Research.

THE INTELLIGENCE SYSTEM INCORPORATES DATA, CONTENT AND INFORMATION FROM VARIOUS SOURCES THAT WE BELIEVE TO BE ACCURATE AND RELIABLE. HOWEVER, THE LORD ABBETT GROUP MAKES NO CLAIMS, REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY, TIMELINESS, COMPLETENESS OR TRUTHFULNESS OF SUCH DATA, CONTENT AND INFORMATION. YOU EXPRESSLY AGREE THAT YOU ARE RESPONSIBLE FOR INDEPENDENTLY VERIFYING YOUR INVESTMENT RESEARCH PRIOR TO FORMING YOUR INVESTMENT DECISIONS OR RENDERING INVESTMENT ADVICE. THE LORD ABBETT GROUP WILL NOT BE LIABLE FOR ANY INVESTMENT DECISION MADE BY YOU OR ANY OTHER PERSON BASED UPON THE DATA, CONTENT AND INFORMATION PROVIDED THROUGH THE INTELLIGENCE SYSTEM OR ON THE LAIS SITE.

· Survival.

THIS SECTION 6 SHALL SURVIVE ANY TERMINATION OF THESE TERMS OF USE OR YOUR USE OF THE INTELLIGENCE SYSTEM..

7. Limitations on Liability.

NONE OF THE MEMBERS OF THE LORD ABBETT GROUP WILL BE LIABLE TO YOU OR ANY OTHER PERSON FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, SPECIAL OR EXEMPLARY DAMAGES (INCLUDING LOSS OF PROFITS, LOSS OF USE, TRANSACTION LOSSES, OPPORTUNITY COSTS, LOSS OF DATA, OR INTERRUPTION OF BUSINESS) RESULTING FROM, ARISING OUT OF OR IN ANY WAY RELATING TO THE INTELLIGENCE SYSTEM, THE LAIS SITE OR YOUR USE THEREOF, EVEN IF THE LORD ABBETT GROUP HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS SECTION 7 WILL SURVIVE ANY TERMINATION OF THESE TERMS OF USE OR YOUR USE OF THE INTELLIGENCE SYSTEM.

8. Miscellaneous Provisions.

· Governing Law. This Agreement will governed by and construed in accordance with the laws of the State of New York, without giving effect to applicable conflicts of law principles.

THE UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT OR ANY VERSION THEREOF, ADOPTED BY ANY STATE, IN ANY FORM ("UCITA") WILL NOT APPLY TO THESE TERMS OF USE. TO THE EXTENT THAT UCITA IS APPLICABLE, THE PARTIES HEREBY AGREE TO OPT OUT OF THE APPLICABILITY OF UCITA PURSUANT TO THE OPT-OUT PROVISION(S) CONTAINED THEREIN.

The Intelligence System is not intended to be used by consumers, nor are the consumer protection laws of any jurisdiction intended to apply to the Intelligence System. You agree to initiate and maintain any action, suit or proceeding relating to these Terms of Use or arising out of the use of the Intelligence System exclusively in the courts, state and federal, located in or having jurisdiction over New York County, New York.

YOU HEREBY CONSENT TO THE PERSONAL JURISDICTION AND VENUE OF THE COURTS, STATE AND FEDERAL, LOCATED IN OR HAVING JURISDICTION OVER NEW YORK COUNTY, NEW YORK. YOU AGREE THAT YOU WILL NOT OBJECT TO A PROCEEDING BROUGHT IN YOUR LOCAL JURISDICTION TO ENFORCE AN ORDER OR JUDGMENT OBTAINED IN NEW YORK.

· Relationship of Parties. The parties to these Terms of Use are independent contractors and nothing in these Terms of Use will be construed as creating an employment relationship, joint venture, partnership, agency or fiduciary relationship between the parties.

· Notice. All notices provided under these Terms of Use will be in writing and will be deemed effective: (a) when delivered personally, (b) when received by electronic delivery, (c) one business day after deposit with a commercial overnight carrier specifying next day delivery, with written verification of receipt, or (d) three business days after having been sent by registered or certified mail, return receipt requested. We will only accept notices from you in English and by conventional mail addressed to: General Counsel Lord, Abbett & Co. 90 Hudson Street Jersey City, N.J. 07302-3973 We may give you notice by conventional mail or electronic mail addressed to the last mail or electronic mail address transmitted by you to us.

· Third-Party Beneficiaries. The members of the Lord Abbett Group are third-party beneficiaries of the rights and benefits provided to us under these Terms of Use. You understand and agree that any right or benefit available to us or any member of the Lord Abbett Group hereunder will also be deemed to accrue to the benefit of, and may be exercised directly by, any member of the Lord Abbett Group to the extent applicable.

· Survival. This Section 8 will survive any termination of these Terms of Use or your use of the Intelligence System. The undersigned hereby signs these Terms of Use. By electronically signing and clicking "Accept" below, these Terms of Use will be legally binding on me. To sign these Terms of Use, confirm your full name and enter your User ID and Password (as your electronic signature) in the fields indicated below and click the “I Accept” button.

Reset Your Password

Financial Professionals*

Your password must be a minimum of characters.

Confirmation Message

Your LordAbbett.com password was successully updated. This page will be refreshed after 3 seconds.

OK

 

Fixed-Income Insights

As the widely anticipated mid-September policy meeting nears, here are the key factors that could sway the Federal Reserve’s decision on hiking interest rates.

 

In Brief

  • The U.S. Federal Reserve is seeking to normalize monetary policy by restoring a key tool in its policy kit—the ability to cut interest rates—to help counteract the next economic downturn.
  • But the central bank’s decision will not be an easy one. At its September 16-17 policy meeting, it will have to balance two countervailing considerations: a strengthening economy and dormant inflation.
  • Another factor the Fed will have to weigh: the potential impact of a weakening in the rest of the global economy, paced by a slowdown in China. 
  • The key takeaway—How the Fed weighs the factors listed above will influence its September policy decision. But the central bank will also need to be mindful of the health of global financial markets.

      

The U.S. Federal Reserve (Fed) needs a more normal (i.e., above zero) interest-rate structure that will allow it to help counteract the next economic downturn. The Fed’s own analysis concludes that its quantitative easing program, under which it purchased bonds in an effort to drive down long-term interest rates, was ineffective at giving a quick boost to the economy.1 The Fed’s need to restore its historical tool of adjusting normal interest rates lower to offset an economic slowdown is driving its plan to boost short-term rates. 

Past rate hikes were generally designed to reduce inflationary expectations by slowing economic growth. In contrast, the Fed now seeks to adjust rates higher without slowing the economy in an environment of well-contained inflation and investor anxiety about the threat of global economic slowdown outside the United States. 

What’s a central bank to do? With the September 17 meeting of the policy-setting Federal Open Market Committee (FOMC) just around the corner, we examine the conflicting goals and economic data that will influence the Fed’s impending policy decision.

Pros and Cons
The Fed’s dual goals of full employment and price stability provide conflicting signals regarding the timing of a rate hike, even before factors outside the United States are considered. Second-quarter U.S. gross domestic product (GDP) grew at a rate of 3.7%, which could presage an overall rate for 2015 of 2.5%; combined with persistent job growth of over 200,000 per month and an unemployment rate of 5.3%, this suggests that the U.S. economy may be able to sustain a gradual increase in rates. These data support arguments for initiating a rate “liftoff.” The fact that the unemployment rate is on the cusp of the 5.0%-5.2% range defined by the Fed as the non-accelerating inflationary rate of unemployment (NAIRU), also supports gradual rate hikes. 

Other factors may sway the Fed in favor of tightening. Increased corporate borrowing to repurchase shares or support mergers and acquisitions may suggest that money is too cheap. It may be argued that higher interest rates could provoke more thoughtful borrowing and avoid a potentially dangerous buildup in leverage. Some members of the Fed may further argue that the benefits of ultra-low rates have already been captured. Corporations have refinanced at low levels, municipalities have locked in lower financing costs, and households have reduced their mortgage rates. Continuation of current zero interest-rate policy may be the epitome of the classic monetary trope “pushing on a string.”

However, low inflation may imply sufficient slack in an economy that may continue to benefit from today’s zero interest-rate policy. July’s core personal consumption expenditures price index, the Fed’s preferred measure of inflation, was 1.2%, according to the Bureau of Economic Analysis, the lowest level since March 2011. With inflation far short of the Fed’s 2% goal, some Fed policymakers may argue that continuation of current policy can help push inflation higher as well as capture additional growth that slightly higher rates might curtail. With the housing and auto sectors key sources of current economic strength, a slight increase in financing costs for either may have an adverse effect on sales as well as associated jobs. Policy doves argue that there is little harm in delaying a rate hike.  

Global Stresses
Beyond conflicting domestic data, the Fed’s policy calculus must now include developments outside the United States. Weakness in China, followed by devaluation of its currency, the yuan, damaged the outlook for many emerging markets and led to an August rout in global securities that continued into September. While the Fed often chooses to pay little heed to developments outside its home country, comments from Fed members during its Jackson Hole conference in late August suggest recent stress in global financial conditions is a consideration that may delay the policy move they want to make. 

These latest developments must be particularly vexing for U.S. policymakers, since the Fed has spent months preparing markets for an interest-rate “liftoff.” The central bank does not want to time a rate hike to coincide with a period of volatile markets and elevated investor fear. A rate hike in such an environment could accelerate global market volatility and capital flows, potentially inviting policy responses from elsewhere in the world, particularly emerging markets. At worst, these policy pushbacks could include currency devaluations, increased tariffs, or crippling rate hikes, reaccelerating financial volatility. This may be a time when the Fed gives greater credence to the interconnectedness of global financial markets.

Decision Time
As the Fed weighs its decision on when to begin rate normalization, it appears to need little additional evidence of sustainable economic growth. Persistent job growth, improving wages, and continued support from housing and auto sales all suggest that the economy is strong enough for monetary policy to begin to step away from near-zero interest rates. 

Low inflation seems to suggest excess U.S. capacity that could continue to benefit from current rate policy. However, low inflation may be heavily influenced by lower commodity prices driven by external supply/demand imbalances and by dollar strength that permits low-priced imports. Importantly, wage inflation does show evidence of creeping higher. The U.S. Department of Labor reported a 2.1% increase in total compensation over the 12 months ended August 31, with wages advancing 2.2%. The decline in a Labor Department measure of the ratio of job seekers to available jobs from 1.6 to 1.0 suggests employers are facing increasingly tighter conditions that will likely push compensation higher. The inflation argument for policy delay seems likely to weaken with wage pressures, and may be trumped by U.S. economics, especially as the unemployment rate has reached the 5.0% to 5.2% NAIRU band.

The crux of the Fed’s decision may be the state of financial markets. Volatility in U.S. markets belies the strength in housing, auto sales and employment. Investor sentiment seems influenced by distress elsewhere in the world, despite the fact that only 1% of U.S. GDP is related to exports to China and lower-priced global goods support U.S. consumption. Continued market fragility will likely delay a rate hike as the Fed seeks to avoid accelerating market distress. However, a return to calmer financial markets may present a window of opportunity that the Fed will not want to miss.

 

1Eric Engen, Thomas Laubach, and Dave Reifschneider, “The Macroeconomic Effects of the Federal Reserve’s Unconventional Monetary Policies,” Finance and Economic Discussion Series 2015-005, Board of Governors of the Federal Reserve System.

 

ABOUT THE AUTHOR

Lord Abbett's Blog

videoOur blog, The Investment Conversation, features timely commentary and analysis from Lord Abbett experts. Join the conversation.

Please confirm your literature shipping address

Please review the address information below and make any necessary changes.

All literature orders will be shipped to the address that you enter below. This information can be edited at any time.

Current Literature Shipping Address

* Required field