Monetary Policy Perspectives
- What balance sheet policies are now appropriate?
- What will be the pace of tightening?
- Is the market appropriately pricing the timing of the next Federal Reserve move?
- How will financial market returns be impacted by Federal Reserve policy?
Monetary Policy Perspectives (MPP) builds upon MA’s economic outlook to help clients understand the policy actions and communications of the Federal Reserve and how those factors affect U.S. markets. MPP covers the broader fixed income market but is particularly focused on the implications of our Fed views for the level and shape of the Treasury yield curve, breakeven inflation rates implied by inflation-indexed yields, and interest rate futures.
The Importance of Understanding Monetary Policy
Monetary policy actions and anticipations of future actions are among the most important forces affecting markets. The factors that dictate monetary policy decisions–inflation, GDP growth, and measures of resource utilization–also help to dictate the pattern of interest rates across the yield curve as well as asset pricing more broadly. MPP gives traders, portfolio managers, and strategists a valuable tool to help them understand and anticipate financial market developments.
A Glimpse into the Minds of Policymakers
By drawing on MPP’s unparalleled understanding of the strategy of monetary policy and a rigorous macroeconomic forecast that replicates the process used inside the Fed, clients gain a unique perspective on how monetary policy decisions are made.
Founded on Rigorous Analytical Models
Our work on monetary policy and fixed income markets is also distinguished by the analytical tools which form the foundation for our analysis. The models include our recession probability tool, Taylor-like policy rules, a model of time-varying equilibrium real Fed Funds rate, and econometric studies on the impact of data and communication surprises on interest rates.
Great Client Service
Perhaps the most important aspect of MPP is the personal attention that each client receives from the MA team. Clients receive visits each year from key members of the MA team. Moreover, clients are encouraged to call and email as frequently as they like for advice on the outlook, monetary policy or financial market prospects.
|Monetary Policy Perspectives||A deep exploration of the context and strategic considerations that FOMC members consider as they make policy decisions helps clients to position themselves before Fed announcements.|
|Macro to Markets||Quantifying the effects of links between policy and financial markets – in development|
|Quick Take||Instant analysis of FOMC Communications and breaking news–generally within minutes of the release. Fed Views (8 per year), Fed Focus (8 per year), Pre-FOMC calls (8 per year), Steady-state Capital Markets Assumptions (annual), Macro Briefs (Change in the Call, reaction to minutes and speeches)|
|Analytical Tools||Clients have access to MA’s suite of analytical tools, our recession probability model, our backward and forward looking Taylor-like policy rules, our model of a time-varying equilibrium real funds rate, and our econometric studies of the impact of data and communication surprises on interest rates.|
|Unlimited Calls and Emails||If you have a question about monetary policy or the economic outlook, our entire team of economists including the firm’s Senior Managing Directors are available to assist you.|
|MA’s USMI Service||MPP clients have access to the premiere U.S. Macro Forecast, MA’s GDP Tracking series, and MA’s conferences and webinars.|