MADRID | By Luis Arroyo |The clock is ticking: if Congress can’t agree to budget terms, parts of the federal government will shut down by Monday midnight. But markets have reacted differently than expected to this political pulse between Democrats and Republicans.
NEW YORK | By Ana Fuentes | The U.S. Federal Reserve has been the talk of the town for weeks because of the tapering soap opera. But how much do we really know about the central bank on its centennial anniversary? An exhibit called “The Fed at 100” opened this Wednesday in New York, aiming to explore the Fed’s pivotal role throughout the history of American finance. And -that’s what we preferred- its response to economic crises.
LONDON | By Michael Gavin at Barclays | Today, we mainly remember the ‘Greenspan conundrum’ as a puzzle about the level of US interest rates in the several years leading up to the 2007-08 financial crisis. But the original conundrum was as much about the insensitivity of long-term interest rates to the tightening of monetary that began in mid-2004 as it was about the level of interest rates.
BANGALORE | By Srikanth Vasuraj | Just a month ago the stock market collapsed and the Rupee fell to an all-time low. Now in just two days things seem to look up and everyone is smiling. What’s up?!
NEW YORK | By Ana Fuentes | Fed officials surprised on Wednesday by deciding not to start trimming the $85 billion-a-month bond-buying program. “We can’t let market expectations dictate our policy actions,” Ben Bernake said, explaining that unemployment in the U.S. has not improved enough to cut stimulus. Reactions were immediate.
MADRID | By J.P. Marin Arrese | When it comes to make a decision, a central banker is not supposed to hesitate, otherwise bewilderment and dismay will take in and lead to utter economic disarray. Mr Bernanke is bound to keep his word about tapering. And he has very little time to deliver before leaving office.
BEIJING | By Hong Hao via Caixin Magazine | The answers to how the Fed’s tapering will impact the market seem a little too obvious: the consensus is that tapering will jolt market interest rates substantially higher and thus provide headwinds for the market. Further, there is the belief that given China’s closed capital accounts, tapering will be inconsequential for its markets. I beg to differ.
By Mike Konczal via The Next New Deal | There’s going to be a new Federal Reserve chair nominated in a few weeks. Last year, asking if the candidates supported the Evans Rule and QE3 would have helped us figure out if they took their role seriously. This year, the questions are more vague.
BEIJING | By Andy Xie via Caixin Magazine | India and China, the elephant and the dragon, are entering a new chapter, and the main question they both face is whether they will reform before a crisis or after.
BANGALORE | By Srikanth Vasuraj | Is India headed back to 1991 crisis? It’s true that the country’s economy is slowing to dangerously low levels, although for PM Manmohan Singh the rupee’s sharp decline is partly due to the U.S. Federal Reserve closing the liquidity tap. The author analyzes the main drivers of the world’s largest democracy.