The Timing Of The Next Recession

If the Fed keeps raising rates in line with the “dots,” monetary policy will move into restrictive territory by early 2019. The good news is that today’s economic imbalances are not as formidable as those that existed in the lead-up to the past few recessions. The bad news is that cracks are starting to form – the U.S. commercial real estate sector warrants monitoring. Remain overweight global equities for now, but look to significantly pare back exposure next summer.

To access the full report entitled “The Timing Of The Next Recession”, please click here.

Populism Blues: How And Why Social Instability Is Coming To America

The U.S. is experiencing a surge in populism because of an intense disconnect between elites and the masses. Elites have captured American institutions, making compromise and reform unlikely without a shock to the system. President Donald Trump identified this crisis, but his policies – at this early stage – do not suggest he will alleviate the core problems of popular well-being. With a recession on the horizon in 2019, we expect socio-political instability to rise ahead of the 2020 election.

To access the full report entitled “Populism Blues: How And Why Social Instability Is Coming To America”, please click here.

Fiscal Policy In The Spotlight

Fiscal policy is likely to be eased modestly in most advanced economies over the next two years. Ironically, fiscal stimulus is coming to America just when the economy has reached full employment. The market is pricing in too little Fed tightening over the remainder of the year. The dollar’s swoon is ending: Go short EUR/USD with a target of parity by the end of the year.

To access the full report entitled “Fiscal Policy In The Spotlight”, please click here.

The Signal From Commodities

Concerns over the Chinese economy, a withdrawal of speculative demand, and strong supply growth have all weighed on commodity prices over the past few months. All three of these forces should ebb over the coming months, providing a more benign cyclical backdrop for commodities and commodity-related investment plays.

To access the full report entitled “The Signal From Commodities”, please click here.