End of Easy Money Policies in U.S., U.K. Raises Threat of Disruptive Change in Financial Markets, Standish Says

NEW YORK and LONDON, June 26, 2014 /PRNewswire/ -- The discontinuation of unusually easy monetary policy in the United States and United Kingdom raises the threat of a disruptive adjustment in financial markets, according to the June 2014 Bond Market Observations from Standish Mellon Asset Management Company LLC, the Boston-headquartered fixed income investment boutique for BNY Mellon.

"No matter how well policy makers attempt to prepare markets for this inevitability, the threat of a disruptive adjustment in financial markets remains high, especially given the very low level of volatility," said Thomas Higgins, chief economist and global market strategist for Standish and author of the report.  "Both the Fed and Bank of England have indicated they are likely to raise interest rates sometime in 2015 as long as their economies continue to perform in line with expectations."

In the June report, Standish lowered its 2014 forecast for global gross domestic product (GDP) to 3.3 percent from 3.6 percent.   While 2014 was off to a slow start, Standish expects that recovering economies in developed markets will benefit emerging markets in coming quarters. Standish raised its inflation forecast for 2014 slightly to 3.7 percent from 3.5 percent.

"We continue to believe a pickup in emerging markets will benefit the performance of emerging market dollar and local currency debt," Higgins said.  "However, the strength of the recent rebound in these markets suggests investors now will need to be more discriminating about where they put their money."

Among the regions viewed favorably by Standish are Latin America, particularly, Mexico, Brazil and Columbia.  In the U.S., Standish said that faster growth coupled with a less accommodative monetary policy could result in higher Treasury yields and a stronger dollar.

Notes to Editors:

Standish Mellon Asset Management Company LLC, with approximately $162 billion of assets under management, provides investment management services across a broad spectrum of fixed income asset classes. These include corporate credit, emerging markets debt (dollar-denominated and local currency), core / core plus, tax–sensitive, short duration, stable value and opportunistic (U.S. and global) strategies.  Standish also offers full service capabilities in insurance client strategies and liability driven investing. The firm includes assets managed by Standish personnel acting as dual officers of The Dreyfus Corporation and The Bank of New York Mellon and Alcentra NY, LLC personnel acting as dual officers of Standish.  Standish, Dreyfus and The Bank of New York Mellon are affiliated subsidiaries of BNY Mellon.

BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.6 trillion in assets under management. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com.

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of March 31, 2014, BNY Mellon had $27.9 trillion in assets under custody and/or administration, and $1.6 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com, or follow us on Twitter @BNYMellon.

All information source BNY Mellon as of March 31, 2014. This press release is qualified for issuance in the UK, Europe and US and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. Any views and opinions contained in this document are those of the author as at the date of issue; are subject to change and should not be taken as investment advice. BNY Mellon Investment Management EMEA Limited and its affiliates are not responsible for any subsequent investment advice given based on the information supplied. This press release is issued by BNY Mellon Investment Management (US) and BNY Mellon Investment Management EMEA Limited (ex-US) to members of the financial press and media and the information contained herein should not be construed as investment advice.    Past performance is not a guide to future performance. The value of investments and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements.  When you sell your investment you may get back less than you originally invested. Registered office of BNY Mellon Investment Management EMEA Limited: BNY Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England no. 1118580. Authorised and regulated by the Financial Conduct Authority. A BNY Mellon Company.     

SOURCE BNY Mellon

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