Confirm you would like to unsubscribe from this list

Don't save

Remove strategy

Confirm you would like to remove this strategy from your list

Welcome to Thornburg

Please select your location and role to help personalize the site.
Please review our Terms & Conditions

For Institutional / Wholesale / Professional Clients

The content on this website is intended for institutional and professional investors in the United States only and is not suitable for individual investors or non-U.S. entities. Institutional and professional investors include pension funds, investment companies registered under the Investment Company Act of 1940, financial intermediaries, consultants, endowments and foundations, and investment advisors registered under the Investment Advisors Act of 1940.


Please read the information below. By accessing this web site of Thornburg Investment Management, Inc. ("Thornburg" or "we"), you acknowledge that you understand and accept the following terms and conditions of use.


Products or services mentioned on this site are subject to legal and regulatory requirements in applicable jurisdictions and may not be licensed or available in all jurisdictions and there may be restrictions or limitations to whom this information may be made available. Unless otherwise indicated, no regulator or government authority has reviewed the information or the merits of the products and services referenced herein. Past performance is not a reliable indicator of future performance. Investments carry risks, including possible loss of principal.

Reference to a fund or security anywhere on this website is not a recommendation to buy, sell or hold that or any other security. The information is not a complete analysis of every material fact concerning any market, industry, or investment, nor is it intended to predict the performance of any investment or market.

All opinions and estimates included on this website constitute judgements of Thornburg as at the date of this website and are subject to change without notice.

All information and contents of this website are furnished "as is." Data has been obtained from sources considered reliable, but Thornburg makes no representation as to the completeness or accuracy of such information and has no obligation to provide updates or changes. Thornburg disclaims, to the fullest extent of the law, any implied or express warranty of any kind, including without limitation the implied warranties of merchantability, fitness for a particular purpose and non-infringement.

If you live in a state that does not allow disclaimers of implied warranties, our disclaimer may not apply to you.

Although Thornburg intends the information contained in this website to be accurate and reliable, errors sometimes occur. Thornburg does not warrant that the information to be free of errors, that the functions contained in the site will be uninterrupted, that defects will be corrected or that the site and servers are free from viruses or other harmful components. You agree that you are responsible for the means you use to access this website and understand that your hardware, software, the Internet, your Internet service provider, and other third parties involved in connecting you to our website may not perform as intended or desired. We also disclaim responsibility for damages third parties may cause to you through the use of this website, whether intentional or unintentional. For example, you understand that hackers could breach our security procedures, and that we will not be responsible for any related damages.

Thornburg Investment Management, Inc. is regulated by the U.S. Securities and Exchange under U.S. laws which may differ materially from laws in other jurisdictions.

Online Privacy and Cookie Policy

Please review our Online Privacy and Cookie Policy, which is hereby incorporated by reference as part of these terms and conditions.

Third Party Content

Certain website's content has been obtained from sources that Thornburg believes to be reliable as of the date presented but Thornburg cannot guarantee the accuracy, timeliness, completeness, or suitability for use of such content. The content does not take into account individual investor's circumstances, objectives or needs. The content is not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services, nor does it constitute investment advice and should not be used as the basis for any investment decision.


No determination has been made regarding the suitability of any securities, financial instruments or strategies for any investor. The website's content is provided on the basis and subject to the explanations, caveats and warnings set out in this notice and elsewhere herein. The website's content does not purport to provide any legal, tax or accounting advice. Any discussion of risk management is intended to describe Thornburg's efforts to monitor and manage risk but does not imply low risk.

Limited License and Restrictions on Use

Except as otherwise stated in these terms of use or as expressly authorized by Thornburg in writing, you may not:

  • Modify, copy, distribute, transmit, post, display, perform, reproduce, publish, broadcast, license, create derivative works from, transfer, sell, or exploit any reports, data, information, content, software, RSS and podcast feeds, products, services, or other materials (collectively, "Materials") on, generated by or obtained from this website, whether through links or otherwise;
  • Redeliver any page, text, image or Materials on this website using "framing" or other technology;
  • Engage in any conduct that could damage, disable, or overburden (i) this website, (ii) any Materials or services provided through this website, or (iii) any systems, networks, servers, or accounts related to this website, including without limitation, using devices or software that provide repeated automated access to this website, other than those made generally available by Thornburg;
  • Probe, scan, or test the vulnerability of any Materials, services, systems, networks, servers, or accounts related to this website or attempt to gain unauthorized access to Materials, services, systems, networks, servers, or accounts connected or associated with this website through hacking, password or data mining, or any other means of circumventing any access-limiting, user authentication or security device of any Materials, services, systems, networks, servers, or accounts related to this website; or
  • Modify, copy, obscure, remove or display the Thornburg name, logo, trademarks, notices or images without Thornburg's express written permission. To obtain such permission, you may e-mail us at info@thornburg.com.

Severability, Governing Law

Failure by Thornburg to enforce any provision(s) of these terms and conditions shall not be construed as a waiver of any provision or right. This website is controlled and operated by Thornburg from its offices in Santa Fe, New Mexico. The laws of the State of New Mexico govern these terms and conditions. If you take legal action relating to these terms and conditions, you agree to file such action only in state or federal court in New Mexico and you consent and submit to the personal jurisdiction of those courts for the purposes of litigating any such action.


You acknowledge and agree that Thornburg may restrict, suspend or terminate these terms and conditions or your access to, and use, of the all or any part this website, including any links to third-party sites, at any time, with or without cause, including but not limited to any breach of these terms and conditions, in Thornburg's absolute discretion and without prior notice or liability.

Give Us a Call

Fund Operations

Federal Reserve to set a live meeting.
Monetary & Fiscal Policy

Fed Finally Set for a “Live” Meeting

Thornburg Investment Management
14 Mar 2022
5 min read

There is a concept within the community of “Fed-watchers” of a “live meeting” where there is a significant chance of the Fed actually changing policy.

This week’s FOMC gathering will most certainly be a “live meeting.”

The Fed has pivoted significantly over the course of the last few months from being concerned about choking off a recovery to being focused on ever-growing, and seemingly persistent, inflation pressures. Ever-increasing prices of goods and services that have expanded far behind more volatile energy and food levels are not an indicator that the Fed has work to do, but that they have made a significant policy error with notable economic and political consequences.

As such, we believe that the Fed will take two actions in the March meeting: They will raise its Federal Funds rate target off the zero bound to 25 basis points (bps), and they will finally end the regular purchases of bonds. Yes, throughout this inflationary environment the Fed has been pumping the money supply. We believe that conclusively ends this week. Notably, they have increasingly indicated that they are data dependent, and as such any move they make in the upcoming meeting may or not be followed by subsequent actions: They don’t have to make that decision now.

Further immediate inputs to the decision on March 16th include:

  • The February employment numbers, which continued the strength seen as the Omicron variant infection wave dissipated
  • February’s set of inflation figures as the year over year CPI accelerated to 7.9% from January’s already 40-year high of 7.5%, and
  • The ECB’s decision to end its bond-buying program in the third quarter as inflation accelerates in the eurozone

Moreover, real average hourly earnings show that while wages are increasing at levels not seen in decades, they are not keeping pace with price increases, leaving the Fed in the position of being blamed for the average person’s decline in purchasing power.

Therefore, we expect that over the year they will likely raise rates by 25 bps four to five times, with a potential significant change in their balance sheet holdings. We believe that change will come largely from the sale of mortgage backed securities assets over time.

How did we get here?

The Fed decided to adopt a framework that was well suited to the economic environment that the US found itself in for the decade post the Great Financial Crisis; inflation was quiescent, despite low unemployment. The relationship between the two, the so-called “Phillips Curve,” was deemed to be flat, meaning that lower unemployment did not seem to cause increased price pressure. Whether financial instability was the result of very low rates (as was the case in the mid-2000s) was not considered relevant by the Fed. In fact, they adopted “financial conditions” measures that included equities and pointed to rising risk asset prices, low inflation, and low unemployment as indicative of the success of their policy. Indeed, there was very little cost in keeping rates low, in their view.

Post the Covid disruptions, and the “heroic” measures that the Fed took to keep markets operating, the Fed adopted a framework of average inflation targeting (AIT), that argued for lower rates for longer in order to make up for prior periods where inflation had undershot their target. As a result, they deliberately set themselves up to be “behind the curve.” When significant amounts of stimulus were added to the economy, and the invention of effective vaccines along with other medical and social changes caused the economy to re-open, the Fed continued to press forward with accommodative policy as that recovery gained momentum. This, again, was deliberate. The trouble came when the speed and strength of the economic and price recovery overwhelmed the speed at which the Fed was willing or able to act to depress price pressures.

At this point, it’s unlikely that inflation will be transitory if the definition is measured in months. Shelter costs and wages are rising significantly, and even with a solution to supply chain disruptions it’s unlikely that we will return to a more normal rate (say below 3%) before at least the end of 2022. This is one reason why the “Whip Inflation Now” rhetoric of the Biden administration is increasing dramatically in the run-up to mid-term elections in 2022. Adding in the conflict in the Ukraine, which will only serve to increase headline inflation (primarily through higher commodity costs, but also through additional supply chain challenges), will not cause the Fed to pause its tightening cycle, at least in the near term.

The Fed has placed itself behind the curve and they will have to catch up over time. Indeed, with an AIT framework the Fed “should” be working to drive inflation below 2%. Furthermore, a flat Philips curve means that much higher rates and unemployment will be necessary to tame inflation. All the challenges that the Fed had are still in play, but in reverse.

Notably, the risk of a recession in the US has increased over the next 12 months. The Fed has run an experiment whereby they attempted to avoid recession (notably at the end of 2018) or any downturn by keeping rates low. The Covid downturn was an exogenous shock, but simply extended the credit cycle. It is worth remembering the period in the mid-2000s when the Fed raised rates consistently by 25bps (using the descriptor “measured,” which has re-entered its lexicon) from 1% to 5.25% after a period in which the Fed had not raised rates for years. Despite moving notably (again, after a too-long period of low rates), the world still endured a recession largely due to overleverage, particularly in the consumer sector. We believe that the Fed will move, and that those movements will look very similar to the cycle of the mid-2000s than the cycle of the mid-2010s (which is to say, consistent and persistent).

The big takeaway is that the period in which low rates was a tailwind for risk assets is ending, and there are notable consequences to that which will be felt over the coming months and years. Volatility is rising, and the outlook is “unusually uncertain.”

Discover more about:

Stay Connected

Subscribe now to stay up-to-date with Thornburg’s news and insights.

More Insights

Racers at the finish line on a track
Global Equity

Forget the Magnificent 7 – Why You Should Invest in Europe’s Fantastic 5

Europe has its own crop of market-beating growth stocks that are overlooked compared to the Magnificent Seven in the US.
Choosing between an older advisor and a younger advisor.
Investor Advice

Should You Opt for an Older or Younger Financial Adviser?

Do you want the wisdom that comes with age or the innovation that comes with youth? Maybe you can have both with an advisory team.
Markets & Economy

Observations: The Value of Dividends and Munis to Stoke Income

Our Co-Heads of Investments make the case for dividend-paying stocks and the tax-free feature of Munis as tax hikes are possible, given our government debt levels.
Markets & Economy

Observations: Market Concentration and the Fed’s Policy Outlook

Our Co-Heads of Investments discuss whether the equity market rally is finally broadening and whether the Fed's forecast for three rate cuts makes sense.
Markets & Economy

Observations: Are Investors Too Complacent?

Our Co-Heads of Investments discuss whether the financial markets' substantial gains following last autumn's 'Fed pivot' left investors smug amid potential dangers.
Woman with her smart phone and plexus connection
Global Equity

Avoiding Concentration Risk in AI: Is It Time for a Reality Check?

Overexuberance for all things AI can create concentration risk. See how we’re curating diversified exposure designed to perform over the long term.

Our insights. Your inbox.

Sign up to receive timely market commentary and perspectives from our financial experts delivered to your inbox weekly.