Taxable MM Commentary

MONEY MARKET | June 2020

Taxable Money Market
Commentary

  • Tweet
  • Share on LinkedIn
  • Share via email
  • Print
  • Download

Patricia Larkin

Chief Investment Officer,
BNY Mellon CIS

May’s unemployment report was a major surprise with the U.S. economy adding 2.5 million jobs during the month. This gain widely exceeded virtually all forecasts and provided some much-needed optimism during the COVID-19 crisis. With that being said, the overall situation is still quite grim with the unemployment rate standing at 13.3% and over 20 million Americans out of work.

At its June 10 meeting, the U.S. Federal Reserve (the “Fed”) gave a downbeat outlook and vowed to use all of the tools in their arsenal to mitigate and ultimately begin to repair the damage done by economic dislocations, which continue to manifest themselves. The Fed held the overnight federal funds target rate in a range of between 0% and 0.25%. Chairman Powell indicated that the Fed has focused on its lending tools rather than any further change in monetary policy, stating, “We are not even thinking about raising rates.”

The Fed will be adjusting the lending programs it deployed to attempt to make the programs as widely used as possible while guarding against fraud and waste. Mr. Powell also encouraged political leaders to work together to increase fiscal stimulus that he viewed as a critical element in supporting a meaningful recovery.

With short-term interest rates on hold for the foreseeable future, investors will be focused on how the recovery unfolds as well as the credit implications of such a severe downturn. Political events will also be closely followed as the presidential election nears.

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 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.

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.  © 2020 BNY Mellon Securities Corporation, distributor, 240 Greenwich Street, 9th Floor, New York, NY 10286.

MARK-124682-2020-06-15