Latest news with #AndrewSzczurowski
Reuters
4 days ago
- Business
- Reuters
Investors double down on September Fed cut after CPI
NEW YORK, Aug 12 (Reuters) - Investors are betting harder on a September Federal Reserve interest rate cut after last month's mild inflation bump, which indicated the pass-through from President Donald Trump's sweeping import duties to goods prices has so far been limited. July inflation numbers released on Tuesday came in largely within expectations, strengthening traders' bets the Fed will start cutting rates at its next policy meeting in September, particularly after a weak employment report in July and sharp downward revisions to job figures for May and June. "I think that the market coming in was quietly expecting a hotter number, and it didn't," said Andrew Szczurowski, co-head of the mortgage and securitized investment team at Morgan Stanley Investment Management. "When you factor in the other side of their (the Fed's) mandate, then all of a sudden it looks like they're missing their labor target more than they're missing their inflation target," he said. Rates futures traders increased bets on a 25 basis point interest rate cut in September after the data release, with the probability of a September cut rising to 98% against about 89% earlier on Tuesday, according to LSEG data. Two-year Treasury yields, which tend to reflect expectations of changes in monetary policy, declined after the data and were last at 3.729%, about two basis points lower on the day. The consumer price index rose 0.2% last month, in line with expectations, and rose 2.7% year on year, below consensus forecasts of 2.8%. Trump used the subdued headline CPI to reinforce his claim that tariffs do not hit consumers, taking aim at Goldman Sachs economists for what he said were bad predictions on the tariff impact. Joseph Lavorgna, counselor to Treasury Secretary Scott Bessent, said Tuesday's inflation figures indicated that exporters were largely absorbing tariffs by cutting prices. "Every month, we keep waiting for the inflation that doesn't present itself, and then people say we need clarity. No, you've had six months in a row where the numbers have disappointed to the downside. Effectively, where you thought there would be inflation, there isn't," he said. Excluding the volatile food and energy components, the CPI rose 0.3%, the biggest gain since January, after climbing 0.2% in June. The so-called core CPI increased 3.1% year-on-year in July after advancing 2.9% in June. Tiffany Wilding, economist at bond manager PIMCO, said she expected core CPI to tick higher to a peak of 3.4% by year-end as tariff-related costs are passed on to consumers. "It's going to take time for these tariffs to really show up in earnest," said Tom Porcelli, chief U.S. economist at PGIM Fixed Income. "Anyone waiting for this to show up in sort of one big move higher in any given month, that's not how it's going to be. It's going to sort of trickle in," he said. The Fed will have further inputs from August inflation and labor data before its next rate-setting meeting. The data came after Trump on Monday nominated economist E.J. Antoni as the new Bureau of Labor Statistics (BLS) commissioner, 10 days after firing the agency's previous leader following a weak scorecard of the job market, accusing her without evidence of manipulating the figures. Antoni has been critical of the BLS, an agency that has come under heightened scrutiny for the eroding quality of the data it produces.
Yahoo
4 days ago
- Business
- Yahoo
Investors double down on September Fed cut after CPI
By Davide Barbuscia NEW YORK (Reuters) -Investors are betting harder on a September Federal Reserve interest rate cut after last month's mild inflation bump, which indicated the pass-through from President Donald Trump's sweeping import duties to goods prices has so far been limited. July inflation numbers released on Tuesday came in largely within expectations, strengthening traders' bets the Fed will start cutting rates at its next policy meeting in September, particularly after a weak employment report in July and sharp downward revisions to job figures for May and June. "I think that the market coming in was quietly expecting a hotter number, and it didn't," said Andrew Szczurowski, co-head of the mortgage and securitized investment team at Morgan Stanley Investment Management. "When you factor in the other side of their (the Fed's) mandate, then all of a sudden it looks like they're missing their labor target more than they're missing their inflation target," he said. Rates futures traders increased bets on a 25 basis point interest rate cut in September after the data release, with the probability of a September cut rising to 98% against about 89% earlier on Tuesday, according to LSEG data. Two-year Treasury yields, which tend to reflect expectations of changes in monetary policy, declined after the data and were last at 3.729%, about two basis points lower on the day. The consumer price index rose 0.2% last month, in line with expectations, and rose 2.7% year on year, below consensus forecasts of 2.8%. Trump used the subdued headline CPI to reinforce his claim that tariffs do not hit consumers, taking aim at Goldman Sachs economists for what he said were bad predictions on the tariff impact. Joseph Lavorgna, counselor to Treasury Secretary Scott Bessent, said Tuesday's inflation figures indicated that exporters were largely absorbing tariffs by cutting prices. "Every month, we keep waiting for the inflation that doesn't present itself, and then people say we need clarity. No, you've had six months in a row where the numbers have disappointed to the downside. Effectively, where you thought there would be inflation, there isn't," he said. Excluding the volatile food and energy components, the CPI rose 0.3%, the biggest gain since January, after climbing 0.2% in June. The so-called core CPI increased 3.1% year-on-year in July after advancing 2.9% in June. Tiffany Wilding, economist at bond manager PIMCO, said she expected core CPI to tick higher to a peak of 3.4% by year-end as tariff-related costs are passed on to consumers. "It's going to take time for these tariffs to really show up in earnest," said Tom Porcelli, chief U.S. economist at PGIM Fixed Income. "Anyone waiting for this to show up in sort of one big move higher in any given month, that's not how it's going to be. It's going to sort of trickle in," he said. The Fed will have further inputs from August inflation and labor data before its next rate-setting meeting. The data came after Trump on Monday nominated economist E.J. Antoni as the new Bureau of Labor Statistics (BLS) commissioner, 10 days after firing the agency's previous leader following a weak scorecard of the job market, accusing her without evidence of manipulating the figures. Antoni has been critical of the BLS, an agency that has come under heightened scrutiny for the eroding quality of the data it produces. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
04-08-2025
- Business
- Business Wire
MSIM Expands ETF Platform by Converting Mortgage Securities Mutual Fund to ETF
NEW YORK--(BUSINESS WIRE)--Morgan Stanley Investment Management (MSIM) today announced the conversion of Morgan Stanley Mortgage Securities Trust (MTGDX) to Eaton Vance Mortgage Opportunities ETF (NYSE Arca: EVMO). Greg Finck and Andrew Szczurowski, Co-Heads of the Mortgage and Securitized investment team, are the portfolio managers along with Matt Buckley and Brandon Matsui. The introduction of Eaton Vance Mortgage Opportunities ETF brings the total number of ETFs on MSIM's platform to 18, including 10 active fixed income ETFs. 'Our ETF platform continues to grow and includes a range of investment strategies to meet investor demand,' said Ally Wallace, Global Head of Capital Markets and ETF Strategy at MSIM. 'We continue to focus on launching best-in-class investment strategies in the ETF wrapper.' EVMO is a diversified portfolio of agency mortgage-backed securities (MBS), non-agency MBS, commercial MBS and asset-backed securities that seeks to outperform broader fixed income markets with less volatility, low correlation and a higher yield. Portfolio Manager Andrew Szczurowski said that EVMO may offer investors an investment-grade alternative to corporate credit or a standalone MBS/securitized allocation. 'We believe agency MBS and other securitized assets can add a diversifying element to investor portfolios, especially those that are heavily exposed to U.S. corporate credit, because they tend to have different risk/return drivers,' said Mr. Finck. Commenting on where he sees investment opportunity, Mr. Szczurowski said, 'In our view, the MBS and securitized markets are driven by outside factors like the housing market, commercial real estate, consumer spending and as such, offer a nuanced way to access fixed income markets that isn't reliant on the business cycle.' With this conversion, MSIM's active fixed income ETF offering now includes: Eaton Vance Total Return Bond ETF (NYSE: EVTR) Eaton Vance Short Duration Income ETF (Nasdaq: EVSD) Eaton Vance Ultra-Short Income ETF (NYSE Arca: EVSB) Calvert Ultra-Short Investment Grade ETF (NYSE Arca: CVSB) Eaton Vance Mortgage Opportunities ETF (NYSE Arca: EVMO) Eaton Vance Intermediate Municipal Income (NYSE Arca: EVIM) Eaton Vance High Income Municipal ETF (Nasdaq: EVYM) Eaton Vance Short Duration Municipal Income ETF (NYSE Arca: EVSM) Eaton Vance High Yield ETF (NYSE Arca: EVHY) Eaton Vance Floating Rate ETF (NYSE Arca: EVLN) As of today, MSIM's ETF platform is comprised of 18 products including six Calvert-branded ETFs, three Parametric-branded ETFs and nine Eaton Vance-branded fixed income ETFs. Launched in early 2023, MSIM's ETF platform has grown to over $6 billion in assets. About Morgan Stanley Investment Management Morgan Stanley Investment Management, together with its investment advisory affiliates, has more than 1,400 investment professionals around the world and $1.7 trillion in assets under management or supervision as of June 30, 2025. Morgan Stanley Investment Management strives to provide outstanding long-term investment performance, service, and a comprehensive suite of investment management solutions to a diverse client base, which includes governments, institutions, corporations and individuals worldwide. For further information about Morgan Stanley Investment Management, please visit About Morgan Stanley Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For more information about Morgan Stanley, please visit Before investing carefully consider the Fund's objective, risks, charges, and expenses available in the prospectus, please download one at Read carefully before investing. Risk Considerations: There is no assurance that a mutual fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that the market values of securities owned by the fund will decline and that the value of fund shares may therefore be less than what you paid for them. Market values can change daily due to economic and other events (e.g. natural disasters, health crises, terrorism, conflicts and social unrest) that affect markets, countries, companies or governments. It is difficult to predict the timing, duration, and potential adverse effects (e.g. portfolio liquidity) of events. Accordingly, you can lose money investing in this fund. Please be aware that this fund may be subject to certain additional risks. Fixed-income securities are subject to the ability of an issuer to make timely principal and interest payments (credit risk), changes in interest rates (interest-rate risk), the creditworthiness of the issuer and general market liquidity (market risk). In a rising interest-rate environment, bond prices may fall and may result in periods of volatility and increased portfolio redemptions. In a declining interest-rate environment, the portfolio may generate less income. Longer-term securities may be more sensitive to interest rate changes. Mortgage and asset-backed securities are sensitive to early prepayment risk and a higher risk of default and may be hard to value and difficult to sell (liquidity risk). They are also subject to credit, market and interest rate risks. Certain U.S. government securities purchased by the Strategy, such as those issued by Fannie Mae and Freddie Mac, are not backed by the full faith and credit of the U.S. It is possible that these issuers will not have the funds to meet their payment obligations in the future. When-Issued Securities, Delayed Delivery Securities, TBAs and Forward Commitments. These investments may result in a form of leverage and may increase volatility in the Fund's share price. They are subject to risks such as failure of the counterparty to perform its obligation to deliver the security, the characteristics of a security delivered to the Fund may be less favorable than expected and the security the Fund buys will lose value prior to its delivery. Due to the possibility that prepayments will alter the cash flows on Collateralized mortgage obligations (CMOs), it is not possible to determine in advance their final maturity date or average life. In addition, if the collateral securing the CMOs or any third party guarantees are insufficient to make payments, the strategy could sustain a loss. High yield securities ('junk bonds') are lower rated securities that may have a higher degree of credit and liquidity risk. Foreign securities are subject to currency, political, economic and market risks. Illiquid securities may be more difficult to sell and value than publicly traded securities (liquidity risk). Inverse floaters are sensitive to early prepayment risk and interest rate changes and are more volatile than most other fixed-income securities. Portfolio Turnover. Consistent with its investment policies, the Fund will purchase and sell securities without regard to the effect on portfolio turnover. Higher portfolio turnover will cause the Fund to incur additional transaction costs. Foreign securities are subject to currency, political, economic and market risk. Derivative instruments may disproportionately increase losses and have a significant impact on performance. They also may be subject to counterparty, liquidity, valuation, correlation and market risks. Active Management Risk. In pursuing the Fund's investment objective, Morgan Stanley Investment Management, Inc. (the 'Adviser') has considerable leeway in deciding which investments to buy, hold or sell on a day-to-day basis, and which trading strategies to use. For example, the Adviser, in its discretion, may determine to use some permitted trading strategies while not using others. The success or failure of such decisions will affect the Fund's performance. Participant Concentration Risk. The Fund has a limited number of intermediaries that act as authorized participants and none of these authorized participants is or will be obligated to engage in creation or redemption transactions. As a result, shares may trade at a discount to net asset value ('NAV') and possibly face trading halts and/or delisting. Trading Risk. The market prices of shares are expected to fluctuate, in some cases materially, in response to changes in the Fund's NAV, the intra-day value of holdings, and supply and demand for shares. The Adviser cannot predict whether shares will trade above, below or at their NAV. Buying or selling shares in the secondary market may require paying brokerage commissions or other charges imposed by brokers. Eaton Vance, Parametric and Calvert are part of Morgan Stanley Investment Management, the asset management division of Morgan Stanley. Morgan Stanley Investment Management Inc. is the adviser to the ETFs. The Eaton Vance, Parametric and Calvert ETFs are distributed by Foreside Fund Services LLC.
