Money Market

Taxable Money Market Commentary

Taxable Money Market Commentary
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February’s employment number was a total shocker. Nonfarm payrolls grew by only 20,000, the weakest job gain since September 2017. This figure reinforced growing concerns over the strength of the U.S. economy as the length of the current expansion approaches a post-war record.

The Federal Reserve (the “Fed”) has decided that “patience” is its new favorite word. Chairman Jerome Powell and a series of other Fed officials have gone on a media blitz to state their case that the overnight federal funds rate is currently at an appropriate level and that quiescent inflation and economic uncertainty allow for this patience.

The world economy is experiencing a downshift in activity as both China and Europe face challenges. The European Central Bank (ECB) surprised the markets by sharply revising downward its growth forecasts, with 2019 moving to 1.1% growth from the previous estimate of 1.7%. The ECB also committed to holding rates steady through 2019 and will be offering a series of long-term bank refinancings beginning in September, designed to encourage bank lending and ease financial conditions throughout the Eurozone.

Major issues that have hovered like black clouds over the economic landscape have not changed in some time. Chinese/U.S. trade bickering, Brexit, and European Union fragility have all been discussed ad nauseam, but until we get some concrete resolution to these, it’s difficult for the markets to make solid investment decisions.

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