A significant portion of U.S.-based asset managers think further Federal Reserve rate hikes would lead to a recession or some disruption in global financial markets, according to research last month by London-based CoreData Research.
The greatest anticipated risk of continued Federal Reserve rate hikes is a possible recession. Overall, 59% of survey respondents took a neutral look at a recession scenario, that there would be “a moderate recession in 2023, followed by a gradual recovery as central bank policies bring down inflation over time,” while 14% opted for a bull case, defined as “a mild recession in the first half of 2023, followed by a strong recovery, falling inflation and rising equity markets [in the second half of 2023],” and 27% said they agree with a bear case, defined as a scenario in which “stagflation and a deep recession [occur] in 2023, accompanied by a 10-20% fall in the equity markets, as central banks struggle to defeat inflation which remains high.”
Within fixed income, 36% of respondents said they are increasing allocations to investment-grade corporate bonds, the most of any fixed-income subtype, and 33% are set to increase allocations to government bonds. A further 23% of respondents said they plan to cut their exposures to emerging-market debt as a consequence of higher yields domestically.
CHAPTER HIGHLIGHTS: • Despite the COVID-19 pandemic, level of concern about various risks remains historically low this year for both pre-retirees and retirees. Compared to 2019, level of concern dropped on some issues for retirees. As a result of this drop, retiree concerns are lower than those of pre-retirees by a larger gap than ever before. • The one exception to this trend was concern about fraud. In 2021, both retirees and pre-retirees were more concerned about fraud, and it is the highest concern among retirees, particularly Black/African American retirees. As in prior studies, those with lower income tend to show much higher levels of concern. • The biggest concerns for pre-retirees are their savings and investments not keeping up with inflation, not being able to afford long-term care, not being able to afford health care costs, not being able to maintain a reasonable standard of living throughout retirement, and potentially depleting all their savings. • While half of pre-retirees plan to retire gradually rather than all at once, retiree respondents indicate this seldom actually happens. Higher-income pre-retirees are more likely to plan to go straight from full time employment to retirement. • The COVID-19 pandemic has not affected plans that pre-retirees have for work, living arrangements, and lifestyle in retirement, although over a quarter report changing their lifestyle. • Despite the financial challenges that retirement poses, most do not have financial advisors, especially preretirees, lower-income respondents, and Black/African American respondents.
The vast majority of Americans of all ages, races, generations and backgrounds say the US has a mental health crisis.
Nine in 10 Americans in a new survey from CNN and the Kaiser Family Foundation say the country as a whole is facing a crisis on this front and about half of adults say they’ve experienced a severe mental health crisis in their family.
CNN published a series of stories this week based on the poll in conjunction with KFF. Read the main report here. And read this from CNN’s polling team about how the survey was conducted.
CNN Chief Medical Correspondent Dr. Sanjay Gupta and senior producer Amanda Sealy went to Durham, North Carolina, to look at how cities are changing the way they respond to 911 calls and utilizing mental health professionals.
There’s also 988 – the three-digit number anyone in crisis can call, but which the survey found few people know about.
The main concern of managers was that their assessors were, like the rest of the population, limited in terms of what they could do to unwind or use to escape due to lockdown restrictions and limited freedom. This contrasted with usual routines.
We asked about the impact of these concerns on the health of claims professionals. Absenteeism within claims teams varied across the companies and while sick leave increased slightly there did not appear to be any significant or concerning trends (Figure 6).
Excess mortality is expected to occur for all years studied with amounts varying by year and age. Although the largest mortality excess numbers for the U.S. general population are foreseen for 2022, excess mortality is expected to decline each year so that by 2030, excess mortality numbers are nearing expected levels. For 2030, mortality is projected to be 2% higher than expected for all ages except age 85. At this age, 2030 projected mortality is estimated to be 1% higher than expected.
Based on the average of the participants, generally, the amount of mortality excess is anticipated to be highest at the younger ages. For example, for 2022, projected mortality is anticipated to be 14% higher compared to expected levels for age 25, 13% higher for age 45, and 10% higher for ages 65 and 85.
With Maryland’s state pension fund nearly $20 billion in the red, a new statewide survey from the Maryland Public Policy Institute reveals that a large majority of voters are concerned about the state’s ability to fund pension benefits for public employees. The survey of more than 500 registered Maryland voters gauged public sentiment on the health of the state pension system and found that two-thirds of Marylanders are worried that the state will have to raise taxes to ensure adequate funding. Read the full survey at mdpolicy.org.
More than 400,000 former and current state employees depend on the Maryland State Retirement and Pension System, yet the system suffers from a $20.1 billion shortfall – or approximately $15,000 per Maryland resident.
Publication Date: 22 March 2021
Publication Site: Maryland Public Policy Institute
This new national survey of working-age Americans also reveals that the COVID-19 pandemic has exacerbated worries about achieving financial security in retirement.
More than half of Americans (51 percent) say that the COVID-19 pandemic has increased concerns about achieving financial security in retirement. And the COVID-19 concern is high across party lines: 57 percent among Democrats; 50 percent for Independents; and at 44 percent for Republicans.
Author(s): Dan Doonan, Kelly Kenneally, Tyler Bond
Publication Date: 17 February 2021
Publication Site: National Institute on Retirement Security
The Casualty Actuarial Society, Canadian Institute of Actuaries, and the Society of Actuaries are pleased to make available results from the 2020 Emerging Risks Survey, the fourteenth in the series. Conducted by Max J. Rudolph of Rudolph Financial Consulting LLC, the survey incorporated a set of Emerging Risks defined by the World Economic Forum as the basis for several of the questions. The survey also included questions related to current risk management topics.
Now available is a report presenting the major findings from the study. The full report will be released later in the year.