Scott Minerd discusses the importance of transitioning sustainable development into an institutional asset class.
The Fed surprised many investors by announcing it will taper in January, but made clear that interest rates will remain near the zero-bound as forward guidance becomes its primary policy tool.
Financial markets have been discounting the end of tapering for months, and whether it happens in December or March is less important than the reality that the U.S. economy is recovering amid a global synchronous expansion.
Major developed economies are all contributing to global economic growth, and this improving fundamental picture, coupled with ongoing monetary accommodation, bode well for risk assets.
As this bull market climbs its “wall of worry,” we can see its underlying strength. Valuation concerns and the risk of a major correction appear overblown, as we should see a continued rebound in economic fundamentals over the coming months.
The Federal Reserve has started to highlight “forward guidance” as a way to keep interest rates lower for longer – and get the exhausted hamster off the treadmill of quantitative easing. We still think tapering remains farther off than most investors expect.
Both bond and equity markets are well-positioned, regardless of whether the U.S. Federal Reserve tapers its asset purchase program.
There remains significant upside for risk assets, but in this liquidity-driven market there is also an increasing risk of a “melt-up” such as the one that preceded the bursting of the tech bubble in early 2000.
With the U.S. economic expansion entering its fifth year and the global economic picture improving, it appears equities in Europe and Asia can still rise.
Ultra loose U.S. monetary policy continues pushing asset values higher at home and abroad. Seasonal factors should also provide a tailwind and lift asset prices across nearly every investment class.
With the partial government shutdown and Washington gridlock behind us for now, interest rates should continue declining and conditions are pointing to a period of renewed strength across asset classes.
In addition to serving as Global Chief Investment Officer of Guggenheim Partners and Chairman of Guggenheim Investments, Scott Minerd is also a member of the Federal Reserve Bank of New York’s Investor Advisory Committee on Financial Markets, an advisor to the Organization for Economic Cooperation and Development, and a contributing member to the World Economic Forum. Minerd is regularly featured in leading financial media outlets, including Financial Times, Barron’s, Bloomberg, CNBC, Fox Business News, Forbes, and Reuters.
Follow Scott on Twitter
Global CIO Scott Minerd visits Bloomberg TV to sort through the market and economic implications of the first rate cut since the financial crisis.
View All Media
You are now leaving this website.Guggenheim assumes no responsibility of the content or its accuracy.
Your browser does not support iframes.
2019 Guggenheim Partners, LLC. All rights reserved. Guggenheim, Guggenheim Partners and Innovative Solutions. Enduring Values. are registered trademarks of Guggenheim Capital, LLC.