To ensure an optimal and secure experience, please upgrade to the latest version of your browser.
Economic activity continues to accelerate as re-openings expand and the effects of stimulus measures take hold. Nonfarm payrolls rose by a better than expected 916,000 in March and the unemployment rate ticked down to 6.0%, a far cry from the 14.8% peak hit in April of last year.
The wide availability of effective vaccines in the U.S. has allowed for significant rollbacks of enforced limits on gatherings and opening hours. Increased optimism on both the consumer and business front has been clearly seen in purchasing manager data as well as home and auto sales. Even the extremely hard hit travel and leisure sectors are showing major signs of recovery, although still well below a return to normal.
At its March meeting, the Federal Reserve (the “Fed”) reiterated its commitment to maintaining the current accommodative monetary policy for the foreseeable future. While acknowledging the substantial progress the economy has made, they also cite the longer-term effects of the pandemic on certain sectors and on more broadly based unemployment numbers.
While the Fed may be in no hurry, the markets will be quick to react to incoming economic data as the recovery strengthens. Inflation is expected to rise as supply shortages and production bottlenecks develop. The Fed has suggested such price increases will be transitory, but the rise in longer term interest rates may suggest otherwise. The uneven recovery throughout the rest of the world is also a potential negative.
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.
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.
Views expressed are those of the author(s) 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.
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 financial professional 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. and BNY Mellon Securities Corporation are companies of BNY Mellon. Dreyfus Cash Investment Strategies (Dreyfus CIS) is a division of BNY Mellon Investment Adviser, Inc. © 2021 BNY Mellon Securities Corporation, distributor, 240 Greenwich Street, 9th Floor, New York, NY 10286.