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Jeremy Forster

Jeremy Forster
Jeremy Forster
Fixed Income Portfolio Manager

Industry experience

With Wellington

16 years
9 years

Jeremy is a fixed income portfolio manager on the Broad Markets Team. He focuses on global macro and US rates strategies, including developing fundamental and market-driven valuation models and determining relative value across sectors.

Prior to joining Wellington Management in 2011, Jeremy worked as a fixed income portfolio manager and trader on the Open Market Desk at the Federal Reserve Bank of New York (2006 – 2011). He began his career there as an assistant economist in the Research Group (2004 – 2006).

Jeremy earned his MBA from New York University (2008) and his BS in economics and finance, magna cum laude, from the University of Wyoming (2004).

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Whiffs of the long-awaited “taper talk” around US monetary policy are finally in the air. The Federal Open Market Committee’s (FOMC’s) June 2021 statement and press conference indicated that the FOMC has discussed when it ought to start tapering its large-scale asset purchases amid the ongoing economic rebound and mounting inflationary pressures.

The FOMC upgraded its US growth and inflation forecasts, yet kept its unemployment rate forecast unchanged, as labor supply shortages in an environment of strong consumption are leading to higher inflation than the FOMC previously anticipated. The increasing inflationary risks also resulted in the median FOMC participant now expecting to hike interest rates twice during…

MACRO
Jeremy Forster
Jeremy Forster
Fixed Income Portfolio Manager
Boston

Hopes and expectations for generous fiscal stimulus to be delivered by the Biden administration are largely baked into the current market narrative. More broadly, the ongoing COVID-19 crisis has provided fresh justification for many of the social and economic policies long proposed by US Democrats — health care for all, stronger safety nets, entitlement protections. For the most part, I have viewed such proposals as fodder for future negotiations with Republicans, but as politically unrealistic given the partisan divide in Washington.

However, I now believe there’s a big paradigm shift in the making. It’s becomingly increasingly clear to me that economists close to the new administration want to fundamentally redefine how people think about government spending and responsible fiscal policy. If they can rewrite that narrative, so to speak, it could be…

MACRO
Jeremy Forster
Jeremy Forster
Fixed Income Portfolio Manager
Boston
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Investors can breathe a collective sigh of relief — for now anyway. The Federal Open Market Committee’s (FOMC’s) March statement and press conference suggested that the FOMC is likely to look through any inflation pickups this year and wait until the labor market has recovered to assess whether inflation can sustainably stay around 2%.

The FOMC projects significant improvement in the unemployment rate and a modest overshoot of its 2% average inflation target in 2021. But even against expectations for higher growth and inflation this year, the median FOMC member’s forecast still anticipated the…

MACRO
Jeremy Forster
Jeremy Forster
Fixed Income Portfolio Manager
Boston

The Federal Open Market Committee’s (FOMC’s) December statement and press conference provided additional assurance that asset buying would continue for the foreseeable future, noting that purchases of US Treasuries and agency mortgage-backed securities (MBS) would proceed at their current pace at least until “substantial further progress has been made” on the labor market and inflation outlooks.

The US Federal Reserve (Fed) appears committed to its dovish monetary policy stance and will likely continue to provide extraordinary accommodation as long as necessary. This is largely because, despite ongoing improvement, the US economic outlook remains highly uncertain. A downside surprise regarding… 

MACRO
Jeremy Forster
Jeremy Forster
Fixed Income Portfolio Manager
Boston

The Federal Open Market Committee’s (FOMC)’s September statement and press conference did not deliver any big surprises. The upshot is that the US Federal Reserve (Fed) appears to be committed to maintaining its “dovish” monetary policy stance for the foreseeable future.

Look no further than the Summary of Economic Projections (SEP), released in conjunction with the FOMC meeting minutes, in which the majority of participants indicated that Fed policy rates should remain around zero through 2023. This was largely expected, given the recent shift in the Fed’s inflation framework: Whereas the Fed has historically targeted an average inflation rate of 2% over time, under the new framework, the Fed could allow inflation to…

MACRO
Jeremy Forster
Jeremy Forster
Fixed Income Portfolio Manager
Boston

On 23 March 2020, the US Federal Reserve (Fed) launched the Secondary Market Corporate Credit Facility (SMCCF) — a special-purpose vehicle (SPV) designed to support the corporate-bond market in the face of the COVID-19 crisis. In late June, the Fed released an official list of its initial bond purchases made via this program.

The more I think about the Fed taking the unprecedented step of buying corporate bonds as part of its crisis-response arsenal, the more I believe it’s difficult to overstate the implications. Here are some of my latest thoughts on the matter.

Five thoughts on the program

In my view, the Fed’s corporate-bond-buying program:

  1. Minimizes tail funding risk. Many US corporate-bond issuers were distressed and deemed to be at risk of bankruptcy as recently as a few months ago. Then came the Fed’s bond-buying program, which is aimed at removing tail funding risk, primarily for corporates that “should” survive (based on their investment-grade ratings pre-COVID-19). The terms of the program have since been…
CORONAVIRUS
MACRO
Jeremy Forster
Jeremy Forster
Fixed Income Portfolio Manager
Boston

Over the weekend, the US Federal Reserve (Fed) took a series of extraordinary measures to support the economy and help ease financial conditions in the wake of the coronavirus pandemic. Specifically, the central bank took the following actions:

  • A 100-basis-point cut in the fed funds rate to a range of 0% – 0.25%
  • Quantitative easing from US$700 billion purchases of US Treasuries and agency mortgage-backed securities (MBS)
  • Coordinated foreign-exchange swap lines with other central banks
  • Improved discount-window borrowing terms
  • Regulatory relief, including scrapping reserve requirements and inserting capital and liquidity buffers to support lending
  • Forward guidance that rates will remain low until the Federal Open Market Committee (FOMC) is “confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

Some have speculated that the Fed could take policy rates into negative territory as other central banks have done, but in his post-meeting press conference, Fed Chair Jerome Powell pushed back on that notion. We believe further easing will come from…

CORONAVIRUS
MACRO
Jeremy Forster
Jeremy Forster
Fixed Income Portfolio Manager
Boston
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