The Outlook


Welcome to The Outlook archives, where you can view several past issues featuring our investment and economic thinking. The Outlook is available in both PDF* and HTML format. We recommend that you review the PDF format, as it is closer in appearance to our printed version.

April 2016

Building Capital in the “New Mediocre” Global Economy

“The good news is that the recovery continues; we have growth; we are not in a crisis. The not-so-good news is that the recovery remains too slow, too fragile, and risks to its durability are increasing. Certainly, we have made much progress since the great financial crisis. But because growth has been too low for too long, too many people are simply not feeling it. This persistent low growth can be self-reinforcing through negative effects on potential output that can be hard to reverse. The risk of becoming trapped in what I have called a “new mediocre” has increased.”

Christine Lagarde, Managing Director of the IMF, April 5, 2016

April 2016

The Federal Reserve’s Asymmetric Monetary Policy

Definition of asymmetry: Uneven or lacking balance. In an asymmetrical situation, a portion of something does not have the same exact form as another portion.

March 2016

The Implications of “Whatever it Takes” Global Monetary Policy

The challenge for investors is to understand the current economic environment which differs from any in the past. The global economy is undergoing an adjustment process that, unlike others, is not easily self-correcting as the growing debt burdens and the deflationary impact of excess capacity and technological advances are not being offset by an adequate level of demand for goods and services. These deflationary forces have led to an environment characterized by increasingly negative interest rates set by central banks in Europe and Japan as the “whatever it takes” monetary policies of both nations have shifted from highly accommodative to aggressive. This is the backdrop for today’s market volatility, and investors should be prepared to move quickly to invest when volatile markets present compelling valuations.

January 2016

Market Update

What we are observing in the markets today is closely following the views we expressed in our year-end Outlook, and events are unfolding in a more compressed timeframe. The year began with the Chinese currency weakening, the Chinese Purchasing Managers Index (PMI) and the U.S. Institute for Supply Management Manufacturers Index (ISM) both disappointing, oil prices declining sharply, and the Saudi government executing a noted Shiite cleric. China’s slowing economy in tandem with lower oil prices is leading to reduced expectations for global growth and a stronger U.S. dollar, which in turn is placing stress on foreign dollar debts and countries needing to import goods that are traded in dollars. These events have combined to unsettle the markets, and conditions remain in place for volatility.