<Click on graphic for larger image> Bloomberg Business – Raising the Inflation Target Would Be a Risky Challenge for the Federal Reserve Innovation is needed but large central banks will be slow to revise their price goals Inflation is a game of trust between the public and the central bank. Judging from measures of inflation expectations tracked… Continue reading The Fed’s Inflation Target
Business Insider – The bond market is about to cross a ‘line in the sand’ … And while the shape of the yield curve is important, Citi’s Technicals team says what is even more important is the type of flattening that occurs. Those scenarios include: Bear flattening, or the yield curve flattening as Treasurys sell… Continue reading The Bond Market
<Click on chart for larger image> Money Beat – The Economy Isn’t As Dismal As the Dismal Scientists Think Economic data have been beating forecasts recently… but that says more about the forecasts than the data Take a look, for example, at Citigroup U.S. economic surprise index, which is positive when data are beating consensus forecasts… Continue reading More On The Surprise Indices
<Click on chart for larger image> Bloomberg Business – Japan’s CPI Falls for 5th Month, Raising Pressure on Kuroda Consumer prices in Japan fell for a fifth straight month, underscoring the central bank’s struggle to spur inflation to its 2 percent target. Friday’s figures are the last reading on this key measure before Governor Haruhiko Kuroda… Continue reading Inflation Continues To Fall In Japan
Bloomberg Business – Thought Volcker Rule Went Too Far? There’s More Coming for Banks The report was required by a brief provision tucked more than 200 pages into Dodd-Frank under section 620. Lenders’ government watchdogs had to review the industry’s investment activities to determine whether they “could have a negative effect on the safety and soundness”… Continue reading Bank Regulation
The Financial Times – Markets have grown unusually ‘complacent’ – Citi Financial market volatility has been remarkably low of late, even for a traditionally sleepy time of the year, a sign that investors have become “complacent”, Citigroup warned on Thursday. Low levels of volatility across equity, fixed income and currency markets “are a strong outlier, not just… Continue reading Citi Is Concerned About Market Complacency
The Wall Street Journal – EU Hopes Helping Workers Will Blunt Populism After Britain’s vote to leave the bloc, Brussels sees efforts to boost social mobility and reduce inequality as a way to limit support for fringe movements The European Union has been left battered by Britain’s vote to leave the bloc and rising populist forces… Continue reading The Rise Of Populist Forces
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<Click on graphic for larger image> CNBC – Fed doesn’t have real plan to make policy: CNBC survey respondents As the Fed meets in Jackson Hole, Wyoming, to discuss how to make monetary policy, many on Wall Street are convinced there isn’t any blueprint to do so. The CNBC Fed Survey found that 60 percent… Continue reading The CNBC Survey Heading Into Jackson Hole
<Click on chart for larger image> CNBC – Some investors think a Fed hike could come in September thanks to a spike in Libor Wall Street now believes there’s a better chance of a September Fed hike, thanks to a rising benchmark interest rate that some experts believe will influence the central bank. The three-month… Continue reading LIBOR’s Effect On The Odds Of A Hike
The Financial Times – Negative interest rates are not the drama they seem Division among central bankers reflects errors that have distorted debate, writes Adam Posen The drama and division among central bankers reflect two intellectual errors that have distorted monetary policy discussions. These are the same mistakes that led to the demonisation of quantitative… Continue reading Negative Rates
<Click on graphic for larger image> Bloomberg.com – Congressional Budget Wonks to Fed: You Probably Aren’t Going to Raise Rates as Fast as You Say Not even the U.S. Congressional Budget Office is buying the Federal Reserve’s projected path for interest rates in coming years, starting with some central bankers’ insistence that a hike next… Continue reading Doubting Fedspeak