FED

Markets 13th November 2014

Testing the rate-hike scenario

By Sreekala Kochugovindan, Anando Maitra (Barclays) | History highlights the importance of the business cycle in determining the effect of rising rates on asset returns, a topic we discussed in depth in Scenarios for a shifting bond landscape. We examined US data since 1925 and selected episodes where US Treasuries sold off by more than 5% in one year. The results were pretty mixed, with equity returns ranging between plus and minus 50% and providing no consistent pattern.

World economy 3rd November 2014

ECB monetary policy places the EZ in an “increasing depression”

SAO PAOLO | By Marcus Nunes via Historinhas | Before it was Peter Coy with John Maynard Keynes Is the Economist the World Needs Now. Now it´s Anatole Kaletsky with The takeaway from six years of economic troubles? Keynes was right: The main lesson is that government decisions on taxes and public spending have turned out to be more important as drivers of economic activity than the monetary experiments with zero interest rates and quantitative easing that have dominated media and market attention.

Markets 30th October 2014

“QE ends and I feel fine”

WASHINGTON | Comment by UBS analysts | The FOMC ended QE and made its Fed funds rate hike guidance a bit more data- dependent. While the funds rate is likely to remain in its current range “for a considerable time” after asset purchases end at the end of this month, rate hikes could occur sooner or later than the Fed currently anticipates depending on the evolution of economic data. This was as straightforward an FOMC statement as could have been expected at the end of QE. It does not suggest changes in Fed thinking; nor does it change our expectations for the first Fed fund rate hike in mid-2015.

World economy 30th October 2014

The Fed becomes slightly more hawkish

MADRID | The Corner | As expected, the Fed confirmed the end of its QE3, although the announcement was slightly more restrictive. According to experts at Link Securitites, “while the decision shows that US economic conditions have improved (especially the labour market) and inflation remains at low levels, the message tone was more hawkish.”

World economy 29th October 2014

Fed shutters bond-buying program

MADRID | The Corner | Showing its confidence in the US economic recovery and the jobs market, the Fed announced it will put an end to its bond purchases scheme before the end of this week, the central bank announced after its FOMC two-days meeting on Thursday. Short-term interest rates will remain near zero for a “considerable time”.

Markets 28th October 2014

Investors to remain dovish until the end of FOMC’s meeting

MADRID | The Corner | Investors experienced the ECB’s stress tests hangover and were quite dovish throughout the Monday’s session. Apparently Tuesday won’t be any different and they will remain prudent until Wednesday, when the FOMC releases its conclusions. Markets expect the Fed to finish tapering, as well as an interest rates hike, experts at Link commented.

Companies 20th October 2014

US corporate results boosted by “ultra-low” interest rates

MADRID | The Corner | US corporate results from the third quarter might be around +4%/5% (earnings per share), but it is highly probable that European results will be weak. Also, there should not be great expectations on central banks to save the situation this time, except, possibly, a more “dovish” refocusing by the American Fed (the US central bank delayed an interest rate increase or even tapering, which would give support to markets).

World economy 17th October 2014

Yellen likely to focus on jobs today; markets get comfort from Bullard: nothing changes

MADRID | The Corner | Markets expect more dovish rhetoric from the Federal Reserve’s chairwoman Janet Yellen, who is addressing a Boston Fed conference on income inequality today. The fact that she has put the issue into the mainstream has earned support from working class communities. Visiting an under-privileged neighborhood on Thursday, she eschewed the chance to talk about monetary policy, but instead listened to stories about layoffs and lost savings. Wall Street took some comfort from the St. Louis Fed President, James Bullard, who said that the Federal Reserve should consider delaying the end of bond purchases, given declining inflation expectations.

World economy 15th October 2014

The Fed tightens and then is surprised with the outcome!

SAO PAULO | By Marcus Nunes via Historinhas | For the last 16 months the Fed has been on “tightening mode”. This is very clearly reflected in the chart for inflation expectations above. When Bernanke started the “taper talk” in May 13 inflation expectations came down and stayed down. Following the June 14 FOMC meeting, dedicated to discussions of “policy normalization” inflation expectations dived! How can they be surprised with the consequences.

World economy 30th September 2014

Steady progress toward US full employment

LONDON | By Rajiv Setia and Anshul Pradhan at Barclays | Developed rates markets rallied globally over the past week, led by the long end, largely in response to the across-the-board underperformance of risk-assets. Figure 1 shows changes in ED-implied rates on the day of the September FOMC meeting, as well as the change from pre-FOMC levels to now.

« 1 … 22 23 24 25 26 … 36 »