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Federal Reserve issues FOMC statement
June 15, 2022--Overall economic activity appears to have picked up after edging down in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low.
Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.
The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The invasion and related events are creating additional upward pressure on inflation and are weighing on global economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks.
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Source: federalreserve.gov
Congressional Budget Office-The Budget and Economic Outlook: 2022 to 2032
June 14, 2022--Summary
CBO projects a federal budget deficit of $1.0 trillion in 2022 and an average annual shortfall of $1.6 trillion from 2023 to 2032, under the assumption that existing laws governing taxes and spending generally remain unchanged. Federal debt held by the public is projected to dip to 96 percent of GDP in 2023, but then to rise each year thereafter, reaching 110 percent in 2032, higher than it has ever been.
In CBO's projections, elevated inflation initially persists in 2022 and then subsides as supply disruptions dissipate, energy prices decline, and less accommodative monetary policy takes hold.
The price index for personal consumption expenditures increases by 4.0 percent in 2022, real (inflation-adjusted) GDP grows by 3.1 percent, and the unemployment rate averages 3.8 percent.
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Source: Congressional Budget Office (CBO)
Passive investing has increased US stock volatility, study finds
June 13, 2022--Analysis raises fresh questions over widespread adoption of index-based investing
The rise of passive investing is distorting price signals and pushing up the volatility of the US stock market, according to academic research.
The analysis raises fresh questions about the widespread adoption of index-based investing, a trend that has allowed investors to save billions of dollars a year in the shape of lower-fees seemingly without hurting returns.
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Source: ft.com
Charles Schwab to pay $187mn in settlement to robo-adviser clients
June 13, 2022--Charles Schwab will pay $187mn in a regulatory settlement after the Securities and Exchange Commission condemned its robo-adviser service for "egregious" allocations of client money that saddled them with "hidden costs"
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Source: ft.com
Weighing the Risks of Inflation, Recession, and Stagflation in the U.S. Economy
June 10, 2022--Summary.
It’s easy to point to the U.S. economy's vulnerabilities: Despite the strong labor market and strong household balance sheets, consumer confidence has been depressed for a while, likely driven by energy prices. Deteriorating business sentiment can weigh on investment rapidly, robbing the economy of momentum.
But the greatest risk for a recession is monetary policy makers, who in trying to moderate inflation have pushed up the risk of a recession. The authors offer four priorities for executives to focus on while navigating the macroeconomic risks.
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Source: Harvard Business Review
V-SQUARE announces launch of V-Shares MSCI World ESG Materiality and Carbon Transition ETF (VMAT)
June 9, 2022--Chicago based V-Square Quantitative Management LLC ( V-Square ), a global asset management firm with sustainability at its core, announced today that it has expanded its market-leading capabilities with the launch of its second thematic ETF the V-Shares MSCI World ESG Materiality and Carbon Transition ETF (VMAT).
Tracking the MSCI World ESG Materiality and Carbon Transition Select Index, the fund represents the performance of companies which are assessed to be sector leaders based on a set of relevant key issues scores that are aligned with the Sustainability Accounting Standards (SASB) Materiality Framework and seek to minimize carbon transition risk and to capture opportunities through companies' operations and business model.
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Source: apnews.com
PIMCO Adds New ETF to Actively Managed Fixed Income Suite
June 9, 2022-- PIMCO, one of the world's premier fixed income investment managers, is expanding its actively managed fixed income exchange-traded fund suite with the addition of a new ETF that may help diversify fixed income allocations for investors concerned about rising rates.
The PIMCO Senior Loan Active Exchange-Traded Fund (LONZ) aims to find compelling opportunities in the senior loan market where investments may offer floating interest rates that can help mitigate the negative impact of rising rates on an investment portfolio.
ith more than 80 credit analysts at PIMCO supporting our loan-oriented portfolio management team, PIMCO will seek to select investments with the aim of prudently managing credit risk while helping investors meet their long-term investment goals.
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Source: PIMCO Investments LLC,
Rewriting Wall Street's Rulebook
June 8, 2022--S.E.C.s Gary Gensler is expected to preview new market rules about a year after shares of GameStop and others shot up in "meme stock" trading frenzy.
The S.E.C. goes against the flow
Gary Gensler, who in his first year as S.E.C. chairman has raised alarms about the way stocks are traded, is expected to preview new market rules today that may limit some of the deals critics have said allow Wall Street firms to take advantage of individual investors.
The potential changes come about a year and a half after shares of AMC, GameStop and other so-called meme stocks shot up hundreds of percentage points in a matter of days. During the rally, a number of retail brokerages, including Robinhood, limited clients from buying more of their shares, prompting investigations from lawmakers and others. Many of the stocks of the companies involved eventually crashed. Melvin Capital, a hedge fund that suffered big losses when shares of GameStop and others soared, recently announced it was closing.
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Source: nytimes.com
SEC Chief Takes Aim at Payment-for-Order Flow in Sweeping Plans for Stock Markets
June 8, 2022--Wall Street's top regulator previewed a set of sweeping changes to rules underpinning the US stock market, setting up a major clash with some of the biggest names in equity trading.
Securities and Exchange Commission Chair Gary Gensler said he's asked the agency's staff to weigh the moves with the aim of making the $45 trillion US equities market more transparent and fair.
His plans could directly impact how firms including Citadel Securities, Virtu Financial Inc. and Robinhood Markets Inc. process retail trade orders, and market dynamics that industry executives say have allowed brokerages to stop charging their clients commissions
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Source: news.yahoo.com
CBO-Monthly Budget Review: May 2022
Jun, 8, 2022--Summary
The federal budget deficit was $423 billion in the first eight months of fiscal year 2022 (that is, from October 2021 through May 2022), the Congressional Budget Office estimates.
That amount is about one-fifth of the $2.1 trillion shortfall recorded during the same period in 2021. Revenues were $768 billion (or 29 percent) higher and outlays were $873 billion (or 19 percent) lower than during the same period a year ago.
The deficit at this point last year was much larger because of spending in response to the coronavirus pandemic-mostly for the recovery rebates (also known as economic impact payments), unemployment compensation, pandemic relief through the Small Business Administration (SBA), and the Coronavirus Relief Fund-and because revenues were lower.
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Source: CBO (Congressional Budget Office)
