MONEY MARKET | December 2019

Taxable money market
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Patricia Larkin

Chief Investment Officer,
BNY Mellon CIS

The November jobs report was a blockbuster, with the U.S. economy generating an estimated 266,000 new jobs during the month and the unemployment rate ticking down to 3.5%. There were also positive figures on the wage front with average hourly wages increasing by 3.2% on a year-over-year basis.

The good news on the employment front helped assuage fears that the longrunning expansion was losing steam. The American consumer continued to lead the way with a 2.9% increase in personal consumption, the primary factor in the 2.1% increase in GDP during the third quarter.

At its final meeting of the year, the Federal Reserve (the “Fed”), as expected, made no change in interest rates. In a unanimous vote, members of the Federal Open Market Committee indicated that they believed rates were “appropriate” for current economic conditions. Furthermore, in their individual projections for the next several years, policymakers saw no change in rate policy for the entire year of 2020 and only one 25-basis-point increase in both 2021 and 2022.

In his post-meeting press conference, Fed Chair Jerome Powell did give the Fed significant leeway by saying Fed officials would respond in case of a material reassessment of economic conditions. This allows them to take stock of any potential trade deals as well as financial and economic situations throughout the rest of the world.

As we enter a presidential election year, in what promises to be a bruising political environment, the Fed clearly hopes that both the U.S. and world economies perform well enough to keep them out of the headlines. Time will tell if the Fed’s Christmas wish comes true.

All investments involve risk, including the possible loss of principal. Certain investments involve greater or unique risks that should be considered along with the objectives, fees, and expenses before investing.

Views expressed are those of the advisor stated and do not reflect views of other managers or the firm overall. Views are current as of the date of this publication and subject to change.

BNY Mellon Investment Management is one of the world’s leading investment organizations and one of the top U.S. wealth managers encompassing BNY Mellon’s affiliated investment management firms, wealth management organizations and global distribution companies. BNY Mellon is the corporate brand of the Bank of New York Mellon Corporation and may also be used as a generic term to reference the corporation as a whole or its various subsidiaries generally.

This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular investment, strategy, investment manager or account arrangement. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Please consult a legal, tax or investment advisor in order to determine whether an investment product or service is appropriate for a particular situation. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. BNY Mellon Investment Adviser, Inc., Dreyfus Cash Investment Strategies and BNY Mellon Securities Corporation are companies of BNY Mellon. Dreyfus Cash Investment Strategies is a division on BNY Mellon Investment Adviser, Inc.  © 2019 BNY Mellon Securities Corporation, distributor, 240 Greenwich Street, 9th Floor, New York, NY 10286.

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