Bond Market Observations

“Given the risks to the outlook, I consider it appropriate for the committee to proceed cautiously in adjusting policy.”
— Janet Yellen, Chair of the Federal Reserve Board of Governors

The Federal Reserve Looks Abroad

  • The Federal Reserve placed much of the burden for their lower Fed Funds forecast on economic and financial market developments outside the U.S.
  •  The subsequent turn toward positive market sentiment has not altered our base case for a muddle-along scenario for the global economy.
  •  It is not yet time for a short duration stance in U.S. rates given heightened uncertainty around the medium-term global outlook.
  •  Emerging Markets should benefit from easier policy in developed markets and stability in commodity prices.

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