June 19, 2017
The Fed on Wed raised its target range for Fed Funds by 25 bp and expects one more rate increase in 2017 along with a slow taper of its balance sheet. The Fed said that while near-term inflation is below expectations, inflation should stabilize around 2% over the medium term. The rates market hasn’t arrived at the same inflation conclusions given weaker than expected economic data, most notably...
The Muni market remains plagued by an acute supply-demand imbalance, which over the 30 days is estimated at -$32 bil. (see chart below). States driving the market supply deficit include California (-$7.53 bil.), New York (-$4.55 bil.), New Jersey (-$3.44 bil.), Arizona (-$2.39 bil.), and Pennsylvania (-$1.75 bil.). We continue to think gross supply for 2017 will be...
The Fed’s slow policy normalization amidst the weaker economic growth should not disrupt economic growth overall, which is sup-portive of credit and the supply-starved Muni market in particular. Economic theory suggests that long-term rates should eventual-ly rise as a result of Fed monetary policy normalization, although rates markets are indicating...Full Weekly Report
Please find attached Ramirez & Co.’s Quarterly Macroeconomic Outlook. In our report, we continue to monitor the US economy, global events and the Fed’s outlook on the economy and rates:
Members of our Financial Strategies Group, Niso Abuaf, Konstantin Semyonov and Duncan Sinclair, would be happy to discuss further any of the material with you.Full Quarterly Report