Scott Minerd discusses the importance of transitioning sustainable development into an institutional asset class.
The Federal Reserve’s decision not to taper quantitative easing telegraphed a mixed signal to markets about policy guidance while tempering forward economic growth expectations. Dramatically lower interest rates can be expected.
Why now may be the most opportune time to buy bonds than at any time in the past two years.
Higher interest rates continue to negatively affect the real economy, increasing the susceptibility of risk assets to downside risk.
Despite disappointing economic data, there continue to be widespread expectations of a period of stronger economic growth just ahead. This growth mirage draws thirsty investors and increases the likelihood that interest rates will continue rising over the near-term.
The slowdown in housing due to higher mortgage rates is becoming more evident in the data for that market. This comes during a time when the Fed is making a crucial decision about tapering quantitative easing, which is causing market uncertainty to rise further.
The release of the July Federal Open Market Committee meeting minutes today and the Jackson Hole Economic Policy Symposium starting tomorrow are likely to dominate near-term activity in financial markets. Despite mixed economic data, it appears increasingly likely that some form of tapering will be announced at the FOMC’s September meeting.
China’s elevated and rising debt levels appear to be one of the largest risks to the global economy today. Although it is difficult to gauge when the risks in that country could manifest as a crisis, investors should act with the knowledge that the margin of safety in the global investment environment continues to decrease.
My long-term view of U.S. equities remains bullish, but a number of indicators, as well as near-term macro challenges, point to a pause in the run-up of that asset class.
The value of the Fed’s portfolio has fallen by about $192 billion as a result of the rise in interest rates over the past quarter. Further losses from rising interest rates could compromise the Fed’s ability to engage in monetary tightening should market conditions warrant such action.
Despite blockbuster new home sales, higher interest rates have put downward pressure on housing activity. This is highly worrisome given the importance of housing to the health of the U.S. economy.
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.
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Scott Minerd, Chairman of Guggenheim Investments and Global CIO, visits Asset TV to discuss investing during one of the strongest economic rebounds in modern history.
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