Timely, concise insights from across Mesirow

Market commentary

After finishing 2023 with a strong rally, interest rates reversed course during the first quarter of 2024 as the market reconciled strong economic data with the timing of a Fed pivot. The last rate hike was in July 2023 when the FOMC raised rates to the 5.25–5.50% range. Since then, the market’s focus has been on when the Fed would begin cutting rates. The market’s speculation going into the new year was for six to seven rate cuts beginning in the first half of the year.

Bretton Woods: An attempt to avoid post-WWI economic mistakes¹

Following World War II, gold played a pivotal role in the post-war international monetary system. Representatives from 44 Allied countries met at the United Nations Monetary and Financial Conference held at Bretton Woods, New Hampshire in July 1944.

Postwar gold standard: “As necessary... as a police force and tax collector” Montagu Norman, Governor of the Bank of England¹

In May 2024, the US, Mexican and Canadian securities markets are moving from a settlement period, or cycle, of two days after trading (T+2) to one day (T+1). That means investors (the securities owner or securities manager) will exchange securities and cash one business day after trading. These North American nations will join India and China in the vanguard of countries settling sooner than T+2.

Potential to increase return while reducing risk by simply hedging currencies

For US investors, the management of currency risk in their portfolios has historically been an afterthought for a variety of reasons and assumptions, chief among them: zero expected return, portfolio diversification, and low materiality in the portfolio. We will touch upon each of these views, discussing their validity, evolution, and relevancy within the current market environment.

Is gold the cause or consequence of peace and prosperity?

One link that connects generations and joins ancient societies to modern ones is money. People, no matter the era, need to trade, save and guard against uncertainty. 

Leo Harmon discusses the economy since the start of Mesirow Monday two years ago, investing, rate cuts and what we can expect in the next couple of months.

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Market commentary

The Federal Open Market Committee (FOMC) continued its aggressive policy tightening during the first half of the year increasing the Federal Funds Rate 100 basis points during 2023. The last of the FOMC’s four hikes came at the July meeting with the current Fed Funds target range at 5.25%–5.50%. The market feels the Fed has reached its terminal rate with inflation on a consistent downward trend. The Fed reiterated its policy would be data dependent while maintaining its goal of returning inflation to 2.00%.