Ethereum’s Merge Is a Transformational Event, but Don’t Expect Digital Assets Prices to Come Out of Their Slump

A major Ethereum blockchain software upgrade was successfully completed earlier today, marking a landmark event for the digital assets industry. The upgrade, known as the “merge,” changes how transactions are verified on Ethereum’s blockchain and dramatically improves its energy efficiency. While this is welcome news, we doubt this means the rout in digital assets prices […]

September 2022

Fed Tightens by 0.75% and Projects Softer Economy

The Federal Reserve announced that it was raising the target range for the Fed funds rate by 75 basis points (bps) to 1.50%–1.75%. An apparent briefing to the financial press last week meant that this course of action was fully priced in by the rates market beforehand, despite just 50 bps being priced as recently […]

June 2022

VantagePoint: Resilience in a Time of Uncertainty

Global inflation has been higher and more persistent than most economists anticipated. Some inflationary pressures related to the pandemic have started to show signs of easing, but new pressures related to Russia’s invasion of Ukraine and lockdowns associated with China’s “zero-COVID” policy create new challenges. At the same time, central banks have declared war on […]

May 2022

Fed Raises Rates and Begins Balance Sheet Run-off

Yesterday, the Federal Reserve announced it would raise the target range for the Fed funds rate 50 basis points (bps) to 0.75%–1.00%. It also formalized plans to reduce its $9 trillion balance sheet starting June 1, with an initial monthly cap of $47.5 billion, rising to $95 billion per month on September 1. At that […]

May 2022

Charting New Waters: What Pension Plan Sponsors Should Know About Digital Assets

Pensions may be missing out on a technological disruption that could represent the most profound new development in the digital economy since its start in the late 1990s. To date, they have lagged other institutional investors in the digital assets space. Barring a few well-publicized exceptions, investments by pensions into digital assets on the blockchain […]

May 2022

Is Bitcoin a Better Disaster Hedge Than Gold?

No, we don’t think so. While bitcoin and gold share some qualities, these two assets are different and should not be viewed as interchangeable in investment portfolios. Bitcoin is much more volatile than gold and has recently been trading more like a pro-risk asset, suffering significant drawdowns during periods of market turmoil. Bitcoin is often […]

February 2022

The Dollar Finds Temporary Support

The US dollar tends to appreciate during two broad economic regimes. One is when the US economy is materially outperforming its global counterparts, attracting capital looking to benefit from the superior US prospects. The other is when growth slows sharply, attracting safe-haven-seeking capital. This is the “dollar smile” model of the currency, and looking at 2022 through this lens suggests some dollar strength may be in store.

December 2021

Is the United States Likely to Enter a Period of Stagflation?

No. While inflation could continue to run hotter than central banks expect, the US employment situation is improving, and economic growth is unlikely to stagnate.

November 2021