MONEY MARKET | January 2019

Taxable money market
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Patricia Larkin

Chief Investment Officer,
BNY Mellon CIS

The Middle East has returned to the front pages following Iranian General Soleimani’s death. While oil prices have jumped in reaction, the rise was nothing like the spike that would have been seen prior to the shale revolution which has reduced the Persian Gulf’s share of worldwide oil production. However, any substantial conflict or disruption to major production facilities or shipping lanes would have negative economic effects around the world.

While it is too soon to have official figures for the 4th quarter of 2019, the Blue Chip consensus forecast looks for growth of between 1.5% and 2.0%. This seems reasonable given the continued strength in consumer spending driven by the robust labor market.

The Federal Reserve (the “Fed”) took no action at their December policy meeting and at his year-end press conference, Chairman Powell stated that “Both the economy and monetary policy right now are in a good place”. That sentiment has been echoed by many other Fed policy makers who seemed to indicate that, barring a major change in economic conditions, rates were likely to remain on hold for the foreseeable future.

The unrest in the Gulf just adds another element to what was already shaping up into an uncertain 2020. The Presidential election, the actual arrival of Brexit and details of the proposed U.S.-China trade deal are all factors which investors and central bankers around the world will have to grapple with as the year unfolds.

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.

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