The Financial Times – Emerging market central bankers: ready for end of low-rate party? Some better prepared than others to face the morning after Central and eastern Europe, or at least the more westerly net commodity importers, also have relatively little to fear from a Fed rate rise. In Poland, where interest rates have been… Continue reading 6 Days Until The Fed Meeting
<Click on graphic for larger image> The Economist – The Federal Reserve: False start The Fed should wait until inflation is closer to target before raising rates Raising rates too soon would be much costlier. A slowdown in growth could turn low inflation into deflation. To perk the economy back up, the Fed would have… Continue reading More Voices Telling The Fed Not To Hike
<Click on graphic for larger image> Bloomberg Briefs – Oil at $20 Is Possible, Says Goldman The global surplus of oil is even bigger than Goldman Sachs Group thought and that could drive prices as low as $20 a barrel. While it’s not the base-case scenario, a failure to reduce production fast enough may require… Continue reading $20 Crude Oil?
The Financial Times – Sam Fleming: Era of low interest rates fails to generate expected growth In a world characterised by flagging growth, the US is leading the transatlantic economies from their deepest post-second world war recession thanks in large measure to the Federal Reserve’s historically unprecedented stimulus policies. But nearly seven years after the… Continue reading What Happened To The Wealth Effect?
<Click on graphic for larger image> The Economist – Buttonwood: Many unhappy returns High valuations should give investors pause IF YOU think that financial assets are expensive at the moment, you are not alone. Deutsche Bank has looked at the prices of equities, bonds and residential property in 15 countries as far back as 1800.… Continue reading Market Valuation
The Wall Street Journal – Tech Firms Are Notably Scarce in IPO Market Technology companies’ share of U.S. initial public offerings has fallen to a seven-year low Technology companies’ share of U.S. initial public offerings has fallen to a seven-year low, boding poorly for investors who have pumped billions of dollars into startups in hopes… Continue reading No Tech IPOs
Comment For months now all eyes have been focused on next week’s FOMC meeting. While economists have been vocal that a rate hike is warranted, markets have been reluctant to price one in. The chart below, which we have been highlighting on a daily basis lately, shows the probability of a hike at next week’s… Continue reading The Odds Of A Rate Hike According To The Markets
Arbor Quantitative Analytics – Fed Funds Rate Hike – Probabilities Based on Econ Data Below are probabilities of being in a rate hike cycle generated using a series of economic indicators (IP, CPI, Wages, UE, and PMI). The model (logistic regression) using all indicators shows a probability of 43% after inputting August 2015 data releases.… Continue reading The Odds Of A Rate Hike According To The Economy
The Wall Street Journal – Jon Hilsenrath: Agreement on September Rate Increase Eludes Fed Federal Reserve officials aren’t near an agreement to begin raising short-term interest rates heading into a crucial week of private discussions before their Sept. 16-17 policy meeting, according to their recent comments. Wednesday marked the beginning of the Fed’s self-imposed blackout,… Continue reading 6 Days Until The FOMC Meeting
Real Time Economics (WSJ Blog) – China’s Yuan Hasn’t Dropped as Far as You Think Against the Dollar When China devalued its currency starting Aug. 11, the financial world trembled. Although the central bank was quick to point out that the devaluation wasn’t aimed at aiding China’s beleaguered exporters and wasn’t the start of a… Continue reading The Yuan
Bloomberg.com – Krugman `Really, Really’ Worried Abenomics Might Fail Nobel laureate Paul Krugman said risks of failure are growing for Prime Minister Shinzo Abe’s “Abenomics” campaign to end Japan’s two-decade slump. “I’m still really, really worried,” Krugman said at a conference in Tokyo on Wednesday. A big problem remains building enough momentum in the economy… Continue reading Krugman Checks In On Abenomics Once Again