More From Rick Rieder
Aging Population May Keep Global Growth Muted
An aging population is likely to keep global economic growth muted in the years to come. This is primarily because the dynamics of the population are rapidly changing.
How Can Changing Demographics Impact Investors?
Changing demographics impact investors in many ways. The demand for bonds could increase, putting downward pressure on yields.
Why Structural Hurdles Could Thwart US Economic Progress
The American economy is facing major structural issues that have the potential to thwart economic progress. The most important hurdle facing the US economy is an aging population.
Outlook for Investors as Rates Start to Rise
Despite headwinds in the form of soft wage growth, low inflation, and a falling labor participation rate, the labor market looks robust.
Fed Rate Liftoff: Not Much Is Likely to Change
So now that the Fed rate liftoff has finally arrived, should you flee to market sidelines? If you can believe history, the answer is an emphatic no.
How an Aging Population Could Affect Your Portfolio
One of the big-picture shifts currently taking place is aging populations, especially in developed nations. Populations are rapidly aging in most developed countries.
Still in a Rut: Soft Wage Growth Persisted in February
The trend of soft wage growth persisted in February. Wage growth hasn’t been able to break out of its rut. It continues to stay at a YoY level of 2%.
Why the Fed Decided to Postpone Liftoff
Forget the September versus December debate. The Fed may already be behind the curve, according to Rick Rieder.
Beyond the Ephemeral: Pay Attention to Demographics
Lost in all the chatter about interest rates is a structural phenomenon that may be of far greater significance: demographics.
When to Expect a Liftoff in Rates
San Francisco Fed president John Williams noted that the Fed’s ability to hold off a liftoff in rates is “more limited” than its ability to tighten. A rate hike could be expected in September if the economy continues to grow in the next two months.
Solid Jobs Growth Points to US Economic Health
Solid employment growth seems to point to the improving health of the US economy. The US markets cheered the April jobs market report on Friday, May 8, 2015.
Recommendation: Look to select areas of emerging market debt
Select areas of the EM debt sector hold good potential, as many of these countries exhibit low leverage levels and are currently funded through year-end.
How Technology Has Revamped Inventory Management
Technology has revamped inventory management for companies in a big way. More and more companies are carrying less and less physical assets.
Tech Adoption Rates Have Reached Dizzying Heights
Technology (XLK) is advancing by leaps and bounds. The diffusion and adoption rates for new technologies have risen over the years as the population has become more tech-savvy.
Must-know: Why low rates could actually harm the US economy
Lastly, as I mentioned in an earlier post, the Fed’s zero interest rate policy may actually be inhibiting economic growth and job creation in unintended ways.
August’s Labor Force Participation Rate Came In at 62.8%
Both the labor force participation rate, which came in at 62.8%, and the employment-population ratio, which came in at 59.7%, were unchanged in August.
What’s behind the US Economy’s Remarkable Labor Market Strength?
The US labor market has shown tremendous resilience amid concerns over various issues, like aging demographics.
Effect of China’s Economic Transition on Consumer-Driven Model
The big theme of 2015 was the Chinese (FXI) (MCHI) economic transition from an investment- and manufacturing-led growth to a consumption- and services-driven economy.
How Structural Changes in the World Economy Affect Markets
For the last few years, the world has been in the midst of a major demographic transition, which has affected the world economy. The aging population is one of the most visible global trends
Market Volatility Isn’t a Reflection of Bond Market Illiquidity
Liquidity hasn’t really deteriorated in some of the major segments of the bond market. Other direct liquidity measures suggest sufficient liquidity in the system.
How Has Technology Influenced Process and Product Innovation?
One of the most prominent effects of technology is on the asset side of the balance sheet. Many technologies drive companies to employ fewer assets in order to generate higher returns.
What Are the Traditional Measures of Labor Productivity?
Labor productivity is an important tool to measure the strength of a country’s economy. Policymakers often use this indicator to compare output efficiency during a particular period.
Is the Labor Productivity Slowdown Mystery a Statistical Mirage?
The mystery of waning labor productivity in various developed economies is still unsettled. However, various economic literature offers plausible explanations.
Why Has Labor Market Productivity Slowed Down?
In recent years, labor productivity growth has slowed down significantly in most of the OECD countries. This decline is broadly spread across sectors.
Why India Is Primed for an Economic Revolution
While global growth is slowing down, the Indian economy seems to be chugging along.
Why Returns Will Likely Stay Volatile in 2016
Markets are likely to remain volatile for the rest of the year and beyond. Uncertainty about the rate hike could add to this volatility.
What Can You Expect from Markets in 2016?
While I don’t have a crystal ball, here are three things I believe all investors need to know about returns in 2016.
2015 Saw Declines Across the Board: Will 2016 Be Any Different?
Last year wasn’t a great one for investors seeking solid returns. With 2016 off to a rocky start, will we see more of the same this year?
Why Returns Will Likely Be Far from Uniform within Asset Classes
During the last few years, return dispersions within asset classes have been dramatic.
Why the Fed May Have Missed Its Window of Opportunity
The problem for the Fed is that the 5.1% unemployment rate has reached what many economists feel is full employment.
Employment Costs Increased in the First Quarter
While the CPI is a measure of inflation in consumer prices, the ECI gives an indication of whether employment costs are rising or falling by measuring inflation in wages.
The US Economy Is Relatively Strong
While the Japanese and the European economies seem to be improving, the US economy still seems to be in a better position than the rest.
Why Is the US Economy in Decent Shape?
The US economy is in decent shape. Low interest rates have been a boon for most families. Home affordability is close to a multi-decade high.
The Must-Know Risks of Fixed Income Investing
There are no free lunches. The risks involved in fixed income investing are two-fold.
Why Corporate Bonds Correlate to Stocks
Corporate bonds, especially high yield corporate bonds, correlate to equities and hence, so they don’t provide great diversification benefits.
Why Higher Equity Volatility Will Support Bonds
Higher equity volatility will support bonds going forward. This year, so far, the VIX has been generally higher than last year.
Why The Unemployment Rate Fell: Dipping Participation Rate
The slide in the unemployment rate is partly due to the workers getting discouraged, that is, getting out of the labor force.