Market Review and Outlook: 2nd Quarter 2015
July 23, 2015
This commentary reviews the previous quarter and discusses our outlook and investment approach for the months ahead.
- In the second quarter, US interest rates embarked on a clear upward trend, attributed to the heightened anticipation of the Fed’s first rate hike in 6 years
- Municipal bond returns were slightly negative for the quarter as mutual fund flows turned negative and new issuance remained muted.
- The sustainability of Puerto Rico’s ever growing debt load came into question as the governor stated that its debts are “not payable”, though most mutual funds had sold off their holdings earlier in the year.
- Greece once again came to dominate headlines when the left-wing politicians that came to power in January resisted the terms of their bailout from international creditors.
- While the Fed suggests that a rate hike will occur “soon”, they have been less clear as to whether soon means September, December, or some other moment in time. Whether or not it does happen soon, we believe interest rates overall are likely to remain within a range for the foreseeable future.