From July 2014 to date, the dollar has risen by 17% and this increase is one of the reasons why the U.S. economy registered paltry growth of only 2% y-o-y in the third quarter. But the market thinks that the strong dollar is here to stay and it is becoming a factor that US policymakers must consider.
Fed President Janet Yellen has pointed out very politely that the law to reform the central bank is “a serious mistake.” She believes monetary policy cannot be linked to indicators like in a mathematical formula.
UBS | 81 months and 200% higher, this US Equity and Derivatives’ Bull is the third longest since 1932 and surpasses the average of 138%. While age or return alone does not signal The End, increasing volatility, Fed rate hikes, and an M&A boom in its third year have all preceded past tops.
There is a definite clash between investors and economists over the US economy. According to Intermoney’s Spanish analysts, markets are looking for reasons to take apart the thesis about the country’s resilient activity, arguing that moderate growth is insufficient. Then there are the economic purists, including many Fed members, who are confident the US recovery is sustainable.
Benjamin Cole via Historinhas | Motor vehicle sales are booming in the United States, up 10% in the last year, and double since the Great Recession. Thanks to blogger Kevin Erdmann of Idiosyncratic Whisk, we have a better understanding of inflation in the U.S. and the role that ubiquitous local property zoning plays in suffocating supply, and thus boosting price.
Better placed observers, such as the Financial Times, bet this week’s FOMC meeting should serve as a test of its members’ mood regarding the planned increase in US rates. Janet Yellen lacks the authority her predecessors commanded and wants to make sure this critical decision garners full support.
With all the talk of an imminent interest rate hike, there are likely to be winners and losers.
It is a simple story of failure, but one that fits the facts. It´s also based on a simple premise: An inflation obsession that took hold in 1974.
While Yellen bet on increasing rates, China’s slowdown concerns Draghi, but he is not considering further stimulus for the time being, says Gabriel Marqués at Intermoney.
LONDON | BNP Paribas | Even after a very dovish FOMC meeting…the USD reaction has been muted. BUT the USD has strengthened against the EM currencies…