NISA Investment Advisors
The latest research and outlooks in the ProAllocate library
- Macro
Construction Activity is Weak Despite Data Centers
Construction data show data-center building has surged but not enough to offset steep declines in office, warehouse and chip-manufacturing construction, limiting overall job creation. The authors argue spare capacity from falling office and warehouse demand should temper fears of demand-pull inflation from the AI buildout.
- Macro
September FOMC: Stand and Deliver
The Fed's FOMC under new Chairman Warsh raised rates 25bps and signaled further hikes, with the dot plot showing a hawkish path and markets pricing higher-for-longer rates. The author argues oil prices, tied closely to deteriorating geopolitics, will primarily drive both short- and long-term interest rates going forward.
- Macro
Chairman Warsh Has Painted Himself Into a Corner
The author argues the Federal Reserve is poised to raise rates this week largely due to a distorted CPI print and communication missteps by Chairman Warsh, though underlying inflation trends do not justify tightening. It contends the hike is unnecessary given stable inflation expectations, a flat Phillips Curve, and labor market conditions.
- Equities
The Long Right Tail: Asymmetry in Single Stock Collars
NISA argues that zero-premium collars on mega-cap IPOs like SpaceX price with pronounced positive skew, driven by high implied volatility, lognormal return properties and low dividend yields. It expects future large IPOs to show similar asymmetric collar pricing, making the structure an appealing hedge despite not representing mispricing.
- Macro
Strong Payrolls Report Doesn’t Change our Fed Outlook
August payrolls rose 162,000 with broad-based job creation, but the labor market remains stable rather than accelerating, keeping inflation risks from employment muted. The Fed is expected to hold rates steady as disinflation from fading tariff and energy effects gains majority support among policymakers.
- Pensions
The Elephants in the Curve: Hyperscalers in Pension Discount Curves
Heavy debt issuance by AI hyperscalers now dominates AA corporate bond curves used to discount pension liabilities, artificially boosting funded status but creating concentrated downgrade risk. Plan sponsors should assess their discount curve's hyperscaler exposure and ensure LDI portfolios can withstand a potential credit dislocation.
- Fixed Income
Bessent Embraces Activist Treasury Issuance
Treasury's plan to double long-end bond buybacks, funded by increased bill issuance, may temporarily flatten the yield curve but does not address the fundamental drivers of rising yields. Oil-driven inflation risk, fiscal deficits, and heavy corporate borrowing remain the true forces pushing long-term rates higher.
- Pensions
The Right Tools for the Job: Managing Pension Risk for Multiemployer Plans
Multiemployer pension plans reached a record 103% aggregate funded status in 2025, prompting trustees to shift from growth-seeking strategies toward liability-aware fixed income approaches like cash flow matching to preserve gains.
- Macro
July CPI Report Encouraging but Inconclusive for the Fed
July core CPI rose 0.215% m/m, too ambiguous to resolve the Fed's rate-path debate as energy prices fell but AI-driven electronics costs added new inflationary pressure. The authors still expect the Fed to hold rates all year, with the next move more likely a cut than a hike.