Three Trends for Cash Managers to Monitor in 2017

Few years in recent memory rivaled the events of 2016. The Brexit vote and Trump’s win confounded pundits and prognosticators. Multiple terror attacks and a migrant crisis roiled a fractured European Union, and the United States was rocked by ongoing racial tensions and acts of home-grown terrorism. But, in spite of these tumultuous events, we saw unemployment fall to historic lows, with run-ups to historic highs in all the major market indexes by year-end. Globally, a much-feared “hard landing” scenario in China never materialized. And by 2017, crude oil futures had almost doubled to a more stable range north of $50 per barrel.

Where does all this conflicting information leave institutional cash investors in 2017? Our white paper this month, Trumponomics, Debt Ceiling Rollercoaster and Geopolitics: Three Trends to Watch in 2017, helps to provide some answers. For managers concerned about maintaining safety of principal, liquidity and competitive returns in an uncertain world, our research team has identified three key areas to focus on in the coming year. To begin with, “Trumponomics” will play a big role, and unfortunately we’ll be in a “wait-and-see” mode, at least until after the first 100 days of his presidency. Also, geopolitical events – from China’s economy to the EU response to immigration and Brexit challenges, to ongoing uncertainty in the Middle East, to name just a few – will have a direct impact on fixed income asset markets. Lastly, and perhaps most importantly, another political fight about raising the U.S. debt ceiling looms, which could dramatically affect the supply and cost of government money market funds.

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Best Regards,

Ben Campbell
CEO