Bloomberg View – Mark Whitehouse: The Fed’s Global Dollar Problem The Federal Reserve might be doing the right thing for the U.S. economy by moving to bring interest rates back up to normal. But for foreign companies and governments that have borrowed trillions of U.S. dollars, the adjustment could be painful. Thanks in large part… Continue reading The World Is Binging On Dollars
Project Syndicate – Mohamed A. El-Erian: America’s Confidence Economy Even if a bump in the economic data does arrive, it may not last, unless the Trump administration advances policies that enhance longer-term productivity, through, for example, education reform, apprenticeship programs, skills training, and labor retooling. The Trump administration would also have to refrain from pursuing protectionist trade… Continue reading Economic & Business Confidence
Bloomberg Gadfly – Lisa Abramowicz: Blackstone Sends Warning to Illiquid Debt Funds Blackstone Group just sent an ominous message to many debt-fund managers: They are promising their clients too much. Since the 2008 financial crisis, asset managers have pledged they could both invest in risky, infrequently traded assets while allowing clients to withdraw their money whenever they… Continue reading Hedge Fund Liquidity
The Wall Street Journal – Gap Between Fed-Funds, Overnight Treasury Repo Rates Holds Analysts attribute divergence to investors chasing scarce supply of short-term Treasury bills A key overnight borrowing rate used across Wall Street still lags behind the policy benchmark the Federal Reserve voted to lift Wednesday by a quarter percentage point, highlighting changing forces at work in… Continue reading Effective Rates vs. Repo Rates
Bloomberg – Bond-Yield Rebound Poses a Threat to Stock Rally Higher bond yields, whether they signal a healthy economy or stretched stock valuations, appear to have staying power, analysts say U.S. bond yields are topping a key measure of the dividends that large U.S. companies pay—a shift that has broad implications for investors who have viewed… Continue reading TIPS Overbought, but Expected to Outperform in Year Ahead
The Financial Times – Markets Spotlight: Drumbeat of China bulls is banging much louder FT columnists look at positive signals for Beijing and implications of the Fed rate rise Investors may be wary of being burnt by China but the drumbeat of bullish noises are banging ever louder from bank strategists, argues the FT’s Jennifer Hughes.Morgan… Continue reading China No Longer Mass Seller of U.S. Treasuries
Financial Times – US dollar continues post-Fed rate rise slide, Asian stocks mixed The US dollar continued its slide in the wake of last week’s widely expected decision by the Federal Reserve to raise interest rates, while Asian stocks were mixed. The US dollar index remains the focal point for markets, extending its losing streak… Continue reading US Dollar Favored to Rebound
Bloomberg.com – As Yellen Complains of ‘Noisy’ GDP, the Fed Makes a Racket Federal Reserve Chair Janet Yellen grumbled this week that gross domestic product is a “noisy” number. Lately the source of the racket has been within her central bank. First-quarter GDP estimates from regional Fed banks show widely different views of the economy,… Continue reading Comparing Atlanta Fed’s GDPNow To New York Fed’s Nowcast
Chicago Tribune – Fed’s rate hike likely won’t end the bull market for stocks When interest rates are rising, people with money in stocks sometimes worry. After all, there is an old Wall Street adage: “Three steps and a stumble.” It means watch out after the Federal Reserve raises interest rates three times because stocks… Continue reading The S&P 500’s Unique Out-Performance During a Tightening Campaign
Reuters – Fed raises rates as job gains, firming inflation stoke confidence Fed policymakers noted that inflation was now “close” to the central bank’s 2 percent target and that business investment had “firmed somewhat” after months of weakness. However, they did not flag any plan to accelerate the pace of monetary tightening, with the policy-setting committee… Continue reading U.S. 10yr Total Returns Don’t Keep Pace with Inflation as Fed Tightens
Medium – Neel Kashkari: Why I Dissented In summary, I dissented because the key data I look at to assess how close we are to meeting our dual mandate goals haven’t changed much at all since our prior meeting. We are still coming up short on our inflation target, and the job market continues to strengthen, suggesting… Continue reading Neel Kashkari Explains Why He Dissented