Emerging market stocks look more resilient to a Fed rate hike

April 9, 2015

Members of the Legio X Fretensis (Malta) re-enactment group take part in a display of ancient Roman army life at Fort Rinella in Kalkara, outside Valletta

Expectations may have been pushed to later this year for when the U.S. Federal Reserve will hike interest rates, but a repeat of another steep sell-off in emerging market stocks appears unlikely as much has already been priced in – and because of the stronger dollar.

Patient: Fed may drop the word, not the idea

March 18, 2015

RTR4R4RY.jpgFed Chair Janet Yellen may signal later today that she is no longer patient about when to consider raising rates but any eventual hike is likely to come after June, judging by how many key economic reports so far this year have undercut expectations.

Euro may not be on a one-way road to parity

March 17, 2015

RTR4SXKP.jpgSigns the euro zone economy may have turned a corner just as many begin to question the timing of a U.S. interest rate hike could soon put a floor under the euro after a 13 percent plunge so far this year.

Prescient Yellen saw limits of zero Fed interest rates back in 2009

March 4, 2015

yellen.jpgDespite the Federal Reserve’s trillions of dollars in newly printed money, workers’ wages and overall U.S. inflation have failed to take off since the recession. Longer-term borrowing costs, from 10-year Treasury yields to 30-year home mortgages, have also compressed without any real signs of reversing. While this has perplexed many economists, transcripts of the U.S. central bank’s crisis-fighting meetings in 2009 show that Janet Yellen, then the head of the San Francisco Fed, was prescient in warning colleagues of these very problems.

Transcripts show just how scary things were getting for Yellen and the Fed in 2009

March 4, 2015

yellen2009.jpg The U.S. Federal Reserve just released full transcripts of its crisis-fighting meetings of 2009, when the U.S. economy was in the depths of recession and unemployment was soaring to 10 percent. Janet Yellen, who at the time was head of the San Francisco Fed, gave a sense of just how scary things were getting:

Is a one-way bet on the dollar rising still such a safe bet?

February 4, 2015

Traders work on the floor of the New York Stock Exchange

Borrowing in dollars is like playing “Russian roulette”, India’s central bank chief Raghuran Rajan said on Bloomberg TV this week.

Major central banks set to go their own way, with some risk

January 9, 2015
Real interest rates of world's major central banks

Real interest rates of world’s major central banks

The world’s major central banks have long followed the same general flight path, guided by the economic winds of growth, inflation and financial markets. It has worked pretty well for policymakers in the United States, Europe, Japan, and the United Kingdom: moving together to tighten or loosen monetary policy makes things more predictable for citizens, businesses and investors. It also serves as buffer to any volatile currency movements, at least among developed economies. But six years after the worst recession in decades, this could be the year central bankers split off and – with some risk – go their own way.

from Global Markets Forum Dashboard:

More volatility expected as Fed rate rise looms – Cumberland Advisors’ David Kotok

October 1, 2014

David Kotok, Cumberland Advisors

David Kotok, Cumberland Advisors

A healthy dose of fear has re-entered financial markets in the final three months of the year. The Chicago Board Options Exchange VIX, a widely tracked measure of market volatility, rose to a two-month high on Wednesday.

Rates sweetener makes Fed tapering pill easier to swallow

December 20, 2013

 U.S. and German government bonds came under selling pressure on Thursday, one day after the Federal Reserve announced it will start trimming its monthly asset purchases by $10 billion to $75 billion. The move was much anticipated but was also historically significant – it is the first step towards unwinding the abundant monetary stimulus that helped keep the financial system afloat during years of crises.  

from Rahul Karunakar:

A December taper: a chance to regain lost face?

December 18, 2013

Dear Fed,

You should taper in December and regain lost  face.


A growing but vocal minority of economists


Even if the latest Reuters poll consensus still shows the Federal Reserve will wait until March before trimming its monthly bond purchases, the clamor to do that in December - or rather later today - is rising.