Economy

Does the Fed Have a Brewing Velocity Problem? November 17, 2021

Posted by Steven Vannelli, CFA in Economy

A basic tautology that economists consider when thinking about monetary policy is the velocity of money. MV=PQ translates into Money*Velocity=Price*Quantity. Of course, price*quantity is nominal GDP while “M” is the money supply (for example, M2) while “V” is velocity, or the number of times the…

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Here’s Why the Fed Could Stay Easy for a LOOONG Time November 05, 2021

Posted by Bryce Coward, CFA in Economy, Markets

This week Jerome Powell tossed the market a bone by hinting that the Fed would be patient in raising short-term interest rates due to the continued slack in the US labor market and inflation that would likely be “transitory”. Yet, today, the unemployment rate dropped…

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Japan’s Reopening Trade October 18, 2021

Posted by Steven Vannelli, CFA in Economy, Markets

In this quarter’s strategy package, we share our analysis on Japan’s Reopening Trade. In the full slide presentation, we cover the following: -Japan seems to have crushed the COVID-19 virus (for now at least) with daily new cases under 400/day. Lockdowns are over and the…

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Is Inflation Starting to Impact Equity Returns? October 12, 2021

Posted by Steven Vannelli, CFA in Economy, Markets

Fed funds futures for 2022 and 2023 have broken out to new highs, likely on the back of rising inflation expectations. As things stand now, the market is looking for three hikes by the end of 2023, with the effective fed funds moving from 8bps…

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Breakdown July 23, 2021

Posted by Steven Vannelli, CFA in Economy, Knowledge Leaders, Markets

We believe the technology sector is broadly breaking down. ​​​​​That’s the bad news. The good news is that the correlation between pure growth stocks and pure value stocks has plunged. This means that growth only explains about 5% of the movement in value stocks right…

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