Asset Allocation Reports
Asset Allocation Bi-Weekly – Why We Are Keeping Duration Short (May 8, 2023)
by the Asset Allocation Committee | PDF Financial markets are complicated, and when faced with complication, there is an incentive to simplify. This simplification process takes on several forms, including narratives, bromides, adages, etc. Even the modeling process is a form of simplification. Sayings like “don’t fight the Fed” or “cash is trash” are often… Read More »
Asset Allocation Quarterly (Second Quarter 2023)
by the Asset Allocation Committee | PDF Our forecast includes a normal recession, likely beginning later this year. We also expect a recovery during our three-year forecast period. The path of the Fed’s monetary policy will have an outsized effect on markets. Though market expectations are varied, we expect a measured path for fed funds.… Read More »
Asset Allocation Bi-Weekly – The Fed’s Employment Surprise (April 24, 2023)
by the Asset Allocation Committee | PDF This is the tightest labor market for Black Americans in U.S. history. The Black unemployment rate fell to an all-time low in March unsurpassed since the Bureau of Labor Statistics began a separate calculation for Black workers in 1972. Meanwhile, the labor force participation rate for Black Americans… Read More »
Asset Allocation Bi-Weekly – Increasing Concerns About Commercial Real Estate (April 10, 2023)
by the Asset Allocation Committee | PDF Last month’s failure of Silicon Valley Bank (SIVB, $106.04) showed that the institution had vulnerabilities in both its assets and its liabilities. On the asset side of its balance sheet, the bank had too much exposure to longer-maturity government bonds, which depreciated sharply as the Federal Reserve aggressively… Read More »
Asset Allocation Bi-Weekly – Have Policymakers Solved the Tinbergen Problem? (March 27, 2023)
by the Asset Allocation Committee | PDF Central banking was initially created to address commercial bank runs. Commercial banks engage in a liquidity transformation, where they accept deposits, which are mostly available on demand, and turn that liquidity into less-liquid assets, usually loans or securities. Bank revenue comes from capturing this liquidity premium as less-liquid… Read More »