Central banks

Latest Stories

Uneventful Jackson Hole Meeting Leaves Markets Waiting on Economic Data

By David O'Malley | August 28, 2017

I first want to send my thoughts and well wishes to everyone enduring the impact of Hurricane Harvey in Texas.

Last week’s Jackson Hole Meeting was very uneventful from a market perspective as central banks kept their remarks very much in line with recent commentary. Janet Yellen’s speech felt more like a farewell address than laying out future Federal Reserve (Fed) policy.

Big Week Ahead for Central Banks

By David O'Malley | June 12, 2017

Last Friday presented the first round of cracks in the stock market in recent memory. The technology heavy NASDAQ 100 Index suffered a 2.4% decline with many of the high… Read More

Foreign Demand Driving Credit Spreads Tighter

By Mark Heppenstall | March 23, 2017

Despite recent signs of accelerating growth and inflation in the global economy, central bank monetary policy remains very accommodative. Short-term rates are stuck near or below the zero-level across most of the developed world, and more than $8 trillion in sovereign debt still trades with negative yields. Even BB-rated Portugal can issue 2-year bonds at just over 50 basis points (bps) today, less than half the rate paid by 2-year on U.S. Treasury notes.

Central Banks Take Center Stage

By David O'Malley | January 30, 2017

Stocks made new highs last week as the Dow Jones Industrial Average broke above the 20,000 level on optimism for pro-growth policies from the Trump administration. The week ahead will provide the first significant update on several key central banks’ thinking for 2017.

Central Banks and the U.S. Election in the Spotlight

By David O'Malley | October 31, 2016

I was traveling in California last week and was expecting the selloff in bonds around the globe to be a big story over the weekend. However, when I looked at my phone as I boarded my flight home from San Francisco on Friday and saw the story about the FBI launching a new investigation into Hillary Clinton’s emails, I knew that bonds were no longer a big story.

Inflation Pressure and Complacency About Interest Rate Risk

By David O'Malley | October 24, 2016

For the past few weeks, I have been writing about my concern for fixed income prices over the coming months. U.S. long bonds are on pace this month for their weakest performance since June 2015, according to Bloomberg. I have been asked several times recently why I am growing more concerned about fixed income valuations given my long-term view that rates will remain low for a prolonged period of time. There are several reasons why.

Market Breadth Deteriorating, Inflation Pressure Building

By Zhiwei Ren | October 20, 2016

A New York Times article about how Walmart is getting better results by paying employees more recently caught my attention. Walmart has 1.4 million employees in U.S., and this strategy change will have ripple effects on labor market. In the past few months, we have seen several signs that some long-term trends are changing

Fed Keeps Rates Unchanged. The Number of Dissenters Increase.

By David O'Malley | September 26, 2016

The Federal Reserve (Fed) chose to keep rates unchanged at last week’s meeting; however, the decision was far from unanimous. Three Federal Open Market Committee (FOMC) members dissented from the decision.

Is the Success of Monetary Policy Good for Investors?

By Zhiwei Ren | August 18, 2016

If the original goal of monetary easing was to stimulate growth and inflation, we can say it has failed. The question is: Do investors want the central banks to succeed eventually?

Structural Reform, Not More Monetary Policy, Needed for Stronger Nominal Growth

By David O'Malley | August 1, 2016

Last week the Federal Reserve (Fed) decided to keep short-term interest rates unchanged. The decision was widely expected by market participants, and many now expect the Fed to keep interest rates unchanged well into 2017.



Disclosure Statement

This blog post is for informational use only. The views expressed are those of the author, Dave O’Malley, and do not necessarily reflect the views of Penn Mutual Asset Management. This material is not intended to be relied upon as a forecast, research or investment advice, and it is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.

Any statements about financial and company performance of The Penn Mutual Life Insurance Company or its insurance subsidiaries (each, “Client”) made by the author is provided with a written consent from the Client.  Penn Mutual Asset Management is a wholly owned subsidiary of The Penn Mutual Life Insurance Company.

Read More...

Opinions and statements of financial market trends that are based on current market conditions constitute judgment of the author and are subject to change without notice.  The information and opinions contained in this material are derived from sources deemed to be reliable but should not be assumed to be accurate or complete.  Statements that reflect projections or expectations of future financial or economic performance of the markets may be considered forward-looking statements.  Actual results may differ significantly.  Any forecasts contained in this material are based on various estimates and assumptions, and there can be no assurance that such estimates or assumptions will prove accurate.

Investing involves risk, including possible loss of principal.  Past performance is no guarantee of future results.  All information referenced in preparation of this material has been obtained from sources believed to be reliable, but accuracy and completeness are not guaranteed. There is no representation or warranty as to the accuracy of the information and Penn Mutual Asset Management shall have no liability for decisions based upon such information.

High-Yield bonds are subject to greater fluctuations in value and risk of loss of income and principal. Investing in higher yielding, lower rated corporate bonds have a greater risk of price fluctuations and loss of principal and income than U.S. Treasury bonds and bills. Government securities offer a higher degree of safety and are guaranteed as to the timely payment of principal and interest if held to maturity.

All trademarks are the property of their respective owners. This material may not be reproduced in whole or in part in any form, or referred to in any other publication, without express written permission.

Copyright © 2015 Penn Mutual. All Rights Reserved. All trademarks are the property of their respective owners.

Read Less...