Global Fixed Income Strategy - January 2020

Monthly insights and updates from the Invesco Fixed Income team

Feb 6, 2020 | Invesco Fixed Income

This latest monthly edition leads with an article analyzing why there was a recent monetary acceleration in the US. Measured on a year-on-year percent change basis, M2 and M3 growth have both been accelerating in the US since late 2018. Authors John Greenwood and Adam Burton write that there are two main reasons why broad money growth acceleration has occurred. The first factor has to do with the banking sector and its responses to changes in financial regulation and US Treasury funding strategy, whereas the second factor is associated with the so-called shadow banking sector, which has for a long time been relatively dormant.

The edition also has a Q&A with the Global Liquidity team to review how year-end 2019 played out and share what they expect in the coming months regarding repo market volatility and the Fed’s ability to control it.

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