In this month's Municipal Strategy Report we discuss Fed policy as fundamental questions, such as how inflation expectations impact investment and spending activity, are being re-examined. The current loss of confidence in conventional interpretations of the response of economic variables to monetary policy increases the risk of a monetary policy mistake.
Additionally, the MSR features the following:
- In “California Court’s Pension Ruling May Have Far Wider Implications” we examine the strength of pension protections in California in light of State Supreme Court’s opinion that “while a public employee does have a “vested right” to a pension, that right is only to a “reasonable” pension—not an immutable entitlement to the most optimal formula of calculating the pension.
- In “Comparing Bullet and Barbell Portfolios” we analyze the performance of the two portfolios under various scenarios of future yield curve movements.