Week InReview
Friday | Mar 22, 2019
The Fed Has Settled on `It's Complicated' View

(Mar 21)  —  The FOMC has come and it has gone. Depending on how you use the word, it is impossible not to be simultaneously quite impressed and decidedly unimpressed. They went further than almost anyone expected.

Don’t listen to the Monday morning quarterbacks try to tell you that it makes perfect sense. After all, the economy is slowing.

Just look at the Atlanta Fed  GDPNow  model. And they are doing a solid for the rest of the world. On the other hand, they have made it quite clear that they are the ones converging with the market. Not only in their rate expectations but in the understanding that there is little reason to put a lot of faith in their ability to forecast.

—  Trader's Notes, Bloomberg Government
in case you missed it...
Fees on U.S. equity funds fell to a new record low last year, as relentless pressure from cheaper index-tracking rivals forced asset managers to slash costs in a bid to staunch heavy outflows. (Financial Times | Mar 21)

The Securities and Exchange Commission is set to examine whether investors’ choice of asset management companies will be damaged by competitive pressures that threaten to destroy smaller players. The fight for survival in the fund industry is driving merger and acquisition activity, with many small and midsized managers seeking to forge alliances. (Financial Times | Mar 20)

Wall Street’s volatility complex is roaring back to life as dovish central banks beat recession fears into submission, spurring the fastest return to market calm since 2012. How long the serenity can last is the vexed question. (Bloomberg Markets | Mar 20)

Panic over? It is according to the derivative markets. Wall Street’s Cboe Vix index fell to its lowest level in five and a half months on Tuesday, as diminishing expectations for further U.S. interest rate rises this year continue to boost investors’ appetite for equities. (Financial Times | Mar 19)

A Federal Reserve research paper says U.S. bank holding companies remain highly complicated, despite moves to simplify them since the financial crisis. The paper says "greater complexity can contribute to agency problems and make a failing bank harder to resolve." (Reuters | Mar 19)
A patient Fed
(Mar 20) — The Federal Reserve  doesn't see  any interest rate hikes coming in 2019, so take a look at the new “ dot plot .” “Patient means that we see no need to rush to judgment,” Fed Chair Jerome Powell said, adding it could be “some time” before the jobs and inflation outlooks provide a reason to change policy. The verdict? Treasury yields dropped to the  lowest in more than a year . The central bank’s unexpected move to scrap its forecast for rate hikes this year has led to increased bets that a cut will happen. Dollar bears  may be pleased , but for the most part the decision has left folks  scratching their heads .
binge reading disorder
If you like Sci-Fi, look out for Cy-Phy
As stunning technologies increasingly infiltrate homes, cars and businesses, it’s clear we’re entering a new era that I like to call “the age of cy-phy” — the convergence of cyber space with a plethora of devices and data in our physical spaces.
—  Forbes

Wanted: 3,732 women to govern corporate America
A new California law requires most companies in the state to have at least one woman on their boards of directors by the end of this year. By the end of 2021, they’ll need three. This sea change could cause a measurable shift in the gender balance of U.S. company boards overall.

The joy of being wrong
Today, it can seem like changing your mind is bad or weak. Why would we even consider that we could be wrong about something? But I’ve found admitting I’m wrong and changing my mind hugely rewarding.