Taxable Money Market Commentary
by Senior Portfolio Manager Patricia Larkin
This is Patricia Larkin with a Money Market Commentary for April, 2014.
Economic activity appears to be continuing on a slow but positive growth path. The employment data for March showed an increase in non-farm payrolls of 192,000 following an upwardly revised 197,000 in February. The unemployment rate remained stable at 6.7%. In addition, retail sales, housing prices and the purchasing manager’s index are all at levels that indicate that both consumers and businesses are relatively confident about their own financial condition.
Janet Yellen chaired her first Federal Open Market Committee meeting. As was widely expected, the Committee voted to continue to decrease the amount of Treasury and mortgage securities they are purchasing in the open market. We expect this downward trend to continue for the remainder of the year, barring a substantial downturn in economic activity or unforeseen financial or geopolitical shocks. The Committee also reiterated that it believes that the current federal funds target of 0 to 0.25% would be appropriate for a considerable time after the asset purchase program was fully wound down.
In Europe, the underlying economies remain under significant stress. The European Central Bank has indicated that it stands ready to use “unconventional tools,” should financial conditions warrant. The situation in Crimea does little to bolster confidence in the Eurozone.
Given the uncertain environment, we continue to adhere to our long-held conservative credit philosophy while seeking to maintain appropriate levels of liquidity.
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An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in a money market fund. Yield fluctuates and past performance is no guarantee of future performance.
The statements expressed in this commentary are those of the author as of the date of the article and do not necessarily represent the views its affiliates. The views expressed are subject to change rapidly as economic and market conditions dictate of Dreyfus or, and the statements in the commentary should not be construed as an offer to sell or a solicitation to buy any security. The commentary is provided as a general market overview and should not be considered investment advice or predictive of future market performance. Contact Dreyfus or your advisor for more current information.