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All eyes on the Fed

Published on 04.09.2024 CEST

Macroeconomic update for September 2024

US Federal Reserve Chair Jerome Powell’s recent statement that “the time has come for policy to adjust” marks a shift that financial markets have eagerly been anticipating, following similar moves by other central banks like the Swiss National Bank and the European Central Bank. It comes amid a weakening US labor market, with rising unemployment stoking recession fears. In this context, what is the Multi Asset team’s take, and how are they approaching asset allocation?

Key Takeaways

  1. The need for Fed cuts
    We believe that the weakness in the US labor market, combined with normalizing inflation rates, makes interest-rate cuts not just possible, but necessary.
  2. Clear message from Fed Chair Jerome Powell
    His speech at the annual Jackson Hole conference sent a clear message: “The time has come for policy to adjust. The direction of travel is clear.”
  3. Buying the dip
    We took advantage of the market correction in early August to bring our equity allocation back to target. Stocks have since rebounded. Looser central bank policy is typically positive for risky assets.

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ABOUT THE AUTHOR

  • Dan Scott

    Dan Scott

    Head of Vontobel Multi Asset

    Dan Scott joined Vontobel in 2017. He is Head of Multi Asset, serving both institutional and private clients. Prior to joining Vontobel, he worked for many years at Credit Suisse as Deputy Head of Equity Research and at Kepler as a Swiss equity specialist. He began his career as a journalist in the late 1990s, first at Dow Jones & Company as a staff reporter for the Wall Street Journal, Barron’s, and DJ Newswires, and later as an on-air correspondent for CNBC.

    Show more articles
  • Stefan Eppenberger

    Stefan Eppenberger

    Head Multi Asset Strategy

    Stefan Eppenberger joined Vontobel in 2008. Since September 2024, he is Chief Investment Strategist within Multi Asset and heads the Investment Strategy team. He is responsible for defining the investment strategy applied in client portfolios. He is also a voting member of the Multi Asset Investment Committee. Previously, he held various positions in the fields of economic analysis, investment strategy, asset allocation, fund research, and portfolio management.

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