4 min readYesterday, President Trump announced a broad array of tariffs in what is arguably the most consequential trade action since the establishment of the WTO in 1995. Invoking national security interests, the President announced the imposition of a 10% minimum global tariff effective April 5th. Canada and Mexico were the only notable exceptions, with USMCA-compliant goods…
4 min readThe U.S. auto industry is entering a period of uncertainty due to the looming threat of tariffs on Canada and Mexico, which could have a deleterious effect on vehicles and parts imported from both countries. As of March 11, President Trump has initiated tariffs of 25% on Mexico and Canada, with a temporary reprieve until…
6 min readIn the latest of President Trump’s proposed tariffs, the White House announced plans to impose a 25% tariff on steel and aluminum imports, effective March 12th, 2025. This is not the first time that Trump has imposed tariffs on these metals: in 2018 Trump imposed a 25% tariff on steel and a 10% tariff on…
2 min readYesterday, the FOMC left the range for the Fed Funds Rate unchanged at 5.25% – 5.50%, as expected. While the overall stance remains unchanged from June, Chair Powell was clear the committee is taking a more balanced approach by no longer overemphasizing the inflation side of its mandate. The Committee’s statement noted that the FOMC…
2 min readOn Friday afternoon, the FDIC took the failed Republic First Bank into receivership and the majority of the bank’s assets and liabilities were sold to Fulton Bank on the same day. We do not expect this bank failure to create systemwide turmoil similar to what we experienced in March of 2023 due to Republic First…
4 min readQ1 2024 Performance: Risk Assets Outperform The first quarter of 2024 saw everything from stocks, gold and even Bitcoin rise to record highs as it becomes increasingly likely that the Fed will be able to achieve a soft landing for the U.S. economy. Treasury yields were mixed during the first quarter with 1-month to 6-month…
10 min readDuring the weekend following Silicon Valley Bank’s collapse, it became apparent that the bank run which drove SVB to insolvency was spreading, placing extreme liquidity pressures on a few regional lenders. Bank balance sheets remained fundamentally stable, although, the volume and speed of deposit outflows at some banks was overwhelming available liquid resources. Many banks…
7 min readWhen will “revenge spending” exhaust consumers’ pandemic-era savings? What does this mean for consumption and growth? Introduction Excess savings have become a marque piece of economic outlooks, attempting to estimate when consumers’ “revenge spending” will exhaust bank accounts leading to a drop in consumption. However, Q3 2023’s 4.9% annualized GDP growth, most of which was…
11 min readIntroduction By Lance Pan, CFA Since we started publishing the annual “themes to watch” series in 2008, this edition marks our 16th anniversary of looking at key market-moving trends for institutional cash investors. To shake off our Covid-induced autophobia (fear of being alone), I enlisted members of my credit research team to co-author last year’s…
14 min readIntroduction With the 75-basis-point hike in the Fed funds rate on September 21st, Fed officials now peg their median forecast for the key policy rate in the 4.25%-4.50% range by the end of the year. The resulting rise in bond yields has been so breathtaking that the previous expectation that Fed funds would end the…