Penn State Deputy CIO Sonali Dalal Named CIO at University of St. Thomas

Dalal will lead a new in-house investment office starting in August.

Sonali Dalal, deputy CIO of Penn State University, will be leaving the university after 19 years to take on the role of CIO at the University of St. Thomas in St. Paul, Minnesota.

“Sonali’s track record of success at Penn State has been very impressive,” University of St. Thomas Interim President Rob Vischer said in a statement. “I look forward to her contributions on the president’s cabinet and welcoming her to campus.”

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Dalal, who will start in August, will lead a new in-house investment office that is being launched by the university to manage its $900 million worth of investments. As deputy CIO at Penn State, Dalal managed a group of five other investment professionals and oversaw efforts to source, conduct due diligence and monitor a wide variety of investment managers and investment strategies. For most of 2019, Dalal was the interim CIO at Penn State between the retirement of John Pomeroy and the hiring of current CIO Joseph Cullen.

“Sonali is always looking to learn, build strong relationships, and apply her passion for investing to support the mission and values of Penn State,” Cullen said in a statement last year when Dalal was honored as one of the top 50 women in investment management. “Sonali’s strong analytical skills and ability to make critical judgments and decisions has contributed significantly to the strong investments returns Penn State has experienced during her 15+ years of dedication to the university.”

Dalal joined Penn State in 2003 just after the investment office there was moved in-house. During her tenure, she helped the endowment grow to more than $6 billion from $900 million. Dalal will report to Vischer and Mark Vangsgard, vice president for business affairs and chief financial officer.

“I am honored and excited to join [the] St. Thomas community,” Dalal said in a LinkedIn post. “I look forward to serving the mission by leading [a] new investment office – all for the common good.”

Before joining Penn State, Dalal worked as a manager with the Overseas Investment Finance Group at the Export & Import Bank of India. She holds a chartered accountant designation and bachelor’s degree in commerce from Bombay University, as well as an MBA in finance from Penn State.

“Sonali is a strategic thinker and communicator whose track record as an investor, an analyst and an executive manager is impressive,” Andrew Duff, chair of the St. Thomas board of trustees’ investment committee, said in a statement. “We are thrilled she is joining the St. Thomas team.”

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Should We Even Care If the Yield Curve Inverts?

It’s a classic recession portent. But inversion’s predictive record is spotty.



Long touted as an augury of recessionary misery ahead, an inverted yield curve may not actually be the best at forecasting. And it seems like another inversion will soon test that thesis.

 

The yield curve is currently flirting with becoming inverted, a condition that’s most often defined as when the yield of the 10-year Treasury bond drops below that of the two-year. Right now, they are separated by a microscopic amount. At 3.48%, as of Tuesday’s market close, the 10-year is just four basis points higher than the two-year.  

 

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The last time an inversion occurred was in April, but the curve quickly un-inverted and the spread widened again. While brief inversions have happened this week, they only lasted a matter of hours.

 

In recent days, short-term rates, more sensitive to the Fed’s tightening campaign, have moved up a lot further than has the longer bond’s yield. Analysts say that owes to last week’s alarmingly high Consumer Price Index report, which could prompt the Fed to get even more aggressive.

 

Since World War II, the average is five years between recessions, according to National Bureau of Economic Research data. But the intervals can vary considerably. The positive economic period between the Great Recession and the 2020 pandemic downturn was about 10 years.

 

While yield curve inversion might be a reliable indicator of a recession, the question is: when? The wait time between a curve inversion and a recession’s onset has averaged about 22 months, NBER data show. For the last six recessions, the interlude has ranged from six to 36 months—that’s three years.  

 

While yield curve inversion might be a decent indicator of a recession somewhere up ahead, it isn’t a very reliable market timing tool, wrote Anu Gaggar, global investment strategist for Commonwealth Financial Network, in a report. If you dumped your stocks the moment an inversion happened, and then sat on the sidelines while the market kept rising, you would not be happy.

 

As the previous inversion this year was over quickly, John Lynch, CIO of Comerica Wealth Management, made the point in a report that a “prolonged inversion is required” to be a sure signal of recession.

 

The inversion need not be constant to portend a recession, notes Daniel Phillips, director, asset allocation strategy at Northern Trust Asset Management. From 2006 to 2007, the inversion “went in and out,” he recounts in an interview. The recession arrived in December 2007.

 

There was also a 2019 inversion seemingly predicting the next year’s slump—although, Phillips says, it could not have anticipated the pandemic’s U.S. arrival in early 2020, the development that really triggered the two-month 2020 recession. The 2019 inversion was more centered on the U.S.-China trade war than a worldwide plague, he says.

 

Sometimes, inversions take place without a recession following, such as in 1966. Should one that lasts more than a few days crop up in the near future, we may indeed be staring down at an economic chasm.

 

Related Stories:

 

Maybe an Inverted Yield Curve Isn’t an Ill Portent

 

Spreads Are Narrowing: Could We Get (Gulp) an Inverted Yield Curve?

 

The Yield Curve Un-Inverts: Time to Celebrate?

 

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