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Janus Henderson

May 24, 2019

The Booming U.S. Stock Market … Will It Last?

Stein’s Law, a principle from the late Herbert Stein, chairman of the Council of Economic Advisers during the Nixon administration, states, “If something cannot go on forever, it will stop.” Mr. Stein’s words are a good reminder that knowing if and when to act is never easy.1 The idea seems relevant today in another context: the stock market, which has been booming. After realizing an 18% average annualized total return since the low in early March 2009 (i.e., the bottom of the Global Financial Crisis) through the end of April 2019, investors in the U.S. stock market may ask themselves: “Will this last?”

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Janus Henderson

May 10, 2019

Greater Clarity on Fed Policy, But Not on Financial Market Outcomes

A central component of U.S. monetary policy over the past decade has been forward guidance, that is, transparency on future policy moves. As recently as last summer, Federal Reserve (Fed) officials maintained the drumbeat of additional rate hikes, speaking often of an elusive neutral rate. Also laid out was their planned balance sheet roll-off of Treasuries. Officials’ rhetoric shifted in December as they announced the central bank would effectively pause its normalization program.

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