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Welcome to the latest edition of Vantage Point. Coming hard on the heels of a global pandemic, the war in Ukraine will challenge an already fragile world economy in ways that are hard to predict. In our view the interplay between surging commodity prices, the monetary policy response to much higher inflation and lower growth, and the unprecedented scale of financial sanctions, will be key for what is ahead.
We have written extensively on our expectations for future rate hikes and the peak in US rates. In this paper, the first in a series of three on Quantitative Tightening (QT), we summarize our thinking on QT and its implications for markets.
During the first quarter, the main US benchmarks for equity and bonds both declined. During the past several decades, concurrent declines in stocks and bonds are relatively infrequent. This short note puts the recent quarter in historical context.
Since the Ukraine conflict began, the Japanese Yen has underperformed all major currencies. See the latest analysis on the drivers.
We believe the possibility of a recession in the US over the coming two to three years is increasing. As such, we take a strong signal from the recent (albeit brief) yield curve inversion and in this note, address how our analysis led to this conclusion.
The growth forecast downgrade was prompted by a slew of weakening macro indicators in March -- which we elaborate on in the pages of this note.
As widely expected, the Federal Reserve increased policy rates by 25 bps, the first hike since 2018. We go into further detail on the highlights.
As the Federal Reserve (Fed) is widely expected to raise interest rates for the first time post-Covid following its March 15-16 meetings, we look some important questions.
The ECB delivered a hawkish surprise, during its March 10th policy meeting, despite the Ukraine conflict. We review the implications for macro & markets outlook.
China sets an ambitious growth target for 2022, and policymakers may need to make some compromises.
The Russia-Ukraine war sadly continues. This constitutes the most serious security crisis in Europe in decades and the full repercussions will likely be immense on the global geopolitical landscape.
The Russian invasion of Ukraine has begun. This constitutes the most serious security crisis in Europe for decades. Markets are responding.
Following a recent note on market corrections, this note focuses on the historical rebounds of the S&P 500 from those pullbacks.
Since the market has been flirting with a market correction in recent days with a >10% decline from the recent peak. We provide a few quick stats to put the decline in a historical context.