U.S. Fed Chairman Jerome Powell cut rates in September, consistent with his policy commitment to “sustain the economic expansion.” Similarly, European Central Bank President Mario Draghi reduced the deposit rate and initiated a 20 billion euro per month stimulus package, based on concerns stemming from global trade tensions and Brexit fallout.
Against a backdrop of muted inflation pressures and escalating U.S.-China trade tensions, investors fled to government securities in August as central banks prepared for additional rate cuts to support a slowing global economy.
The IM Sustainable Investing Council drives IM’s global effort by promoting an overall framework for integrating ESG and ESG standards into IM’s investment processes, product development, measurement, education, client engagement and reporting.
As we look ahead to the new year, the key question for liquidity investors is what is the Federal Reserve’s neutral rate. This inferred rate will likely determine the path of interest rates in 2019 and beyond, as the Fed shifts their policy towards managing around neutral.