Current Perspectives

Shining a Light on Indexes – How to Help Investors Better Achieve Their Goals (July 2020)

A Report from the Value Equities Investment Committee | PDF “What is the appropriate benchmark for your strategy?” This is a question frequently posed to an investment manager. Before this question can be answered, it is necessary to gain a solid understanding of the strategy by examining the manager’s investment philosophy and how it is… Read More »

2020 Outlook Update #2: Storm Warning (March 27, 2020)

by Bill O’Grady & Mark Keller We have been updating our 2020 Outlook to keep you informed of our thoughts as conditions evolve. We have refreshed some of the charts from our update last week and added new comments, included below in bold. Update #2: March 27, 2020 | Update #1: March 16, 2020 Summary—High… Read More »

2020 Outlook Update: Storm Warning (March 16, 2020)

by Bill O’Grady & Mark Keller Summary—High Probability of Recession: The economy is facing three simultaneous problems: A public health crisis—COVID-19 and the economic impact of containing it; An oil price war and a regional economic slump; Rapidly rising financial stress caused by (a) and (b) along with underlying unresolved issues. We estimate the odds… Read More »

2020 Outlook: Storm Watch (December 19, 2019)

by Bill O’Grady & Mark Keller Summary – The Base Case: Economy grows at 1.5%; consumption has become the primary driver of growth. Expansion continues to set new records for duration; no recession is our base case in 2020, although there are increasing risks of a downturn. Core inflation max is 2.5% next year. Dollar… Read More »

2019 Outlook: Red Sky at Morning (December 14, 2018)

by Bill O’Grady & Mark Keller Summary: Economy grows at 2.7%. Expansion makes a new duration record; no recession expected in 2019, although the risk of a downturn will be increasing. Core inflation max is 2.5% next year. Dollar weakens, although the direction is mostly dependent on administration trade policy. We expect preparations for the… Read More »

A Primer on Fiscal Policy, Government Debt and Deficits (June 13, 2018)

by Bill O’Grady & Mark Keller In our travels we are almost always asked about the government debt and deficits.  If there is any area of confusion and misunderstanding, public finance could easily top the list.  In response to these persistent questions, we are publishing this Frequently Asked Questions paper to address some of those… Read More »

2018 Outlook: Addendum (January 4, 2018)

by Bill O’Grady & Mark Keller Summary: When we wrote our 2018 Outlook, we were unable to take into account the Tax Cuts and Jobs Act of 2017[1] because the legislation had not been signed by the time we published our report.  This Addendum will address the impact of the tax bill on our forecasts.… Read More »

2018 Outlook (November 30, 2017)

by Bill O’Grady & Mark Keller Summary: Our baseline forecast for 2018 calls for no recession and real GDP growth of 2.25%, with faster growth in H1. Inflation should remain low, with the PCE staying under 2.0%.  Labor markets will remain tight and wage growth will be constrained due to low inflation expectations. Monetary policy… Read More »

2017 Outlook (December 21, 2016)

by Bill O’Grady & Mark Keller Key Points: The economy will avoid a recession in 2017. GDP growth is expected to average 2.8% with core PCE inflation approaching the Federal Reserve’s target of 2.0%. Fixed income markets will be challenging: We expect three rate hikes of 25 bps each by the FOMC; Due to rising… Read More »

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