Views and Analysis
Type:
Author:
Sort:
Jun 4, 2026
Policy Regimes versus Economic Regimes
Apr 15, 2026
The Fallacy of Concentration
Apr 2, 2026
Permanent Capital Meets Private Markets
Sep 10, 2026
Predictive Power of Inferred Fed Surprises
Federal Reserve (Fed) policy expectations are a major driver of financial markets, yet traditional measures of Fed surprises are only available around FOMC announcements. This paper develops “inferred Fed surprises”, a real-time framework that extracts changes in expected Fed policy from daily movements in interest rate markets, allowing investors to monitor how monetary policy expectations evolve between official policy decisions. We show that these inferred surprises contain valuable information ...
Aug 4, 2026
The AI-Energy Nexus
The rapid buildout of artificial intelligence infrastructure is reshaping energy markets through a direct physical channel: data center electricity demand. In this paper, we show that clean energy equities are significantly more sensitive to data center infrastructure returns than traditional energy equities, reflecting their exposure to long-duration investment and grid expansion dynamics. While AI technology indices appear to explain energy returns in simple specifications, their explanatory power ...
Apr 24, 2026
How do Global Portfolio Investors Hedge Currency Risk?
We study how institutional investors hedge foreign exchange risk using more than 25 years of monthly portfolio data from a global custodian, matching asset holdings with FX forward positions for U.S.- and non-U.S.-based investors. Fixed-income investors hedge more than equity investors, non-USD investors hedge more than USD investors, and hedging has risen markedly since 2008. Many investors appear to target and rebalance toward stable hedge ratios. Hedge ratios are related to carry, volatility, ...
Sep 4, 2026
How troubling is the return of US inflation?
The State Street PriceStats index rose 0.44%mom (nsa) in August on a non-seasonally adjusted basis, its largest monthly increase since May after two months of flat or falling prices. This is potentially problematic coming at such a delicate time ahead of the September FOMC. But as troubling as the headline jump looks, the detail behind it suggests almost half of the leap is energy related. It is also a move that consensus estimates appear well prepared for, and may, in the words of Gov. Waller, ...
Aug 21, 2026
The Chair leads the pack
Lagging data supports an aggregate Fed tone that is the most dovish since January. Notably, this shift is not being driven by Warsh, who has maintained a hawkish stance even as broader perceptions of Fed communication have turned more dovish. History suggests that when a large gap emerges between the Chair and the rest of the Committee, policymakers often shift toward the Chair's position. During past episodes of extreme hawkish divergence, aggregate Fed tone became more hawkish on average, narrowing ...
Aug 14, 2026
“What we’ve got here is…failure to communicate”
FOMC Chair Kevin Warsh has assigned all sorts of task forces to rethink Fed processes, including its communications strategy. One change is already obvious – the word count of the statement accompanying FOMC decisions has fallen to the lowest since the late 1990s, when statements were skipped unless there was a policy change. It draws a line under the late Bernanke and Yellen years of over-communication (and over-engineering of policy), but it begs the question of whether such sparse messaging ...
Sep 2026
Does AI Need To Break To Contain Inflation?
Last week's strong US CPI data left a Fed rate hike this week a foregone conclusion and likely inaugurates at least a modest hiking cycle. Inflation pressures are broad and not strictly energy-related, arguing for tighter policy globally. But does one key source of inflation, the AI build-out, need to break, to get price stability back on target? And what does that mean for an asset allocation strategy over the remainder of this year, into 2027? We discuss these questions, as well as how the US ...
Sep 2026
Yen in Black
After years of the market anticipating strength in the Japanese yen, it might finally be here. Aided by official Japanese intervention in the currency and hints of collaboration with the United States, a correction of the JPY’s long-standing perceived undervaluation would make for one of the most meaningful currency trends of the last decade. But why now? Will the yen strength of recent weeks last? And how far can it go? This week, we ask Michael Metcalfe, Global Head of Macro Strategy at State ...
Sep 2026
Understanding the Rate Market Turmoil
Almost no matter where you look, bond yields are making new multi-decade highs, with concerns growing that rising debt servicing costs in high debt economies risk a snow-balling effect that culminates in a fiscal crisis. As if that weren’t enough, risk markets, particularly equities and credit, still appear oblivious to the potential for upset. After a pivotal week of speeches and pronouncements from US policy officials, it seemed a good time to catch up with Peter Vincent, State Street Markets' ...
Feb 2026
A step on the brakes
Holdings Institutional portfolios stayed strongly tilted towards equities, with stock allocations at their highest since 2007 and bond allocations at their lowest since 2008, while the US remained a clear regional overweight. Risk Appetite Risk appetite eased back to neutral after a mid month lift, as Fed uncertainty and liquidity concerns encouraged a more cautious mix, with selective risk still expressed in emerging market bonds and FX and high yield versus investment grade.
Dec 2025
Investors neutral amidst data uncertainty
Holdings Institutional portfolios remain heavily overweight in US equities and technology, favouring quality, growth and large caps, with stock allocations at an eighteen‑year high and bonds and cash still out of favour. Risk Appetite Risk appetite has eased to neutral as investors rotate out of cyclicals and commodities into defensives and the US dollar, while still taking selective risk in high yield credit and technology rather than retreating from equities.
Nov 2025
One Step Forward, One Step Back
Holdings Institutional portfolios remain heavily overweight in US, Tech, and growth oriented styles, with stock allocations at an 18-year high. Risk Appetite The risk appetite index has dropped to neutral as investors rotate out of cyclicals and commodities into defensives and the US dollar.
1. Peter L. Bernstein Award for Best Article in an Institutional Investor Journal in 2013; Bernstein-Fabozzi/Jacobs-Levy Award for Outstanding Article in the Journal of Portfolio Management in 2006, 2009, 2011, 2013 (2), 2014, 2015, 2016, 2021; Graham & Dodd Scroll Award for article in the Financial Analysts Journal in 2002 and 2010. Roger F. Murray First Prize for Research Presented at the Q Group Conference in 2012, 2021, 2023. Harry M. Markowitz Award for Best Paper in the Journal of Investment Management in 2022, 2023. Doriot Award for Best Private Equity Research Paper in 2022.