Central Banking – Daniel Hinge: Teaching machines to do monetary policy The researchers identify around 10,000 unique words across every transcript produced during Alan Greenspan’s tenure as chair, which LDA is able to boil down into about 40 topics. Each FOMC meeting can then be represented as the percentage of time spent on each topic. In this way, the authors… Continue reading Machine Learning Central Banking
The Wall Street Journal – ECB, Fed Are Growing Apart, Moving Markets ECB’s asset purchases will continue, while the U.S. central bank moves away from easy money The ECB said it would halve its monthly bond-buying to €30 billion but keep buying until the end of September 2018, while reiterating that interest rates would remain at current levels… Continue reading The ECB And Fed Growing Apart
The Financial Times – ECB’s slow retreat from QE buoys risk appetite Central bank remains dovish as it struggles to hit inflation target while scaling back stimulus At the very end of 2015, the European Central Bank clarified a seemingly mundane detail about the historic bond-buying programme it had begun earlier that year: the central bank… Continue reading More On The ECB
The Financial Times – Equity bull market is too miserable to call time on The global bull market is more than eight years old. That’s twice the age of the 2003-07 rally. Since March 2009, the S&P is up 281 per cent, the Nikkei up 203 per cent, the Euro Stoxx 147 per cent, EM equities… Continue reading The Bull Market Roars On
Bloomberg Markets – Bond Volatility Shows Signs of Life as Rates Divergence Widens MOVE index rises to highest since May, monthly average gains As U.S. Treasury yields climb to the highest in seven months, volatility in the bond market is also trending up. Bank of America Merrill Lynch’s MOVE Index, a gauge of price… Continue reading Bond Market Volatility Ticks Up
The Wall Street Journal – Phase Out Libor? Not So Fast, Bankers Say Investors and bankers aren’t so sure they want to get rid of Libor, the scandal-plagued financial benchmark that’s also deeply ingrained in markets across the globe. Nearly 80% of market participants believe the London interbank offered rate should continue to be used as… Continue reading LIBOR’s Slow Death
Bloomberg View – Elizabeth Warren: Don’t Let Big Banks Escape the Fed’s Scrutiny In the aftermath of the crisis, Congress determined that banks with more than $50 billion in assets — roughly the 40 biggest in the country — posed an outsized risk to the economy. The 2010 Dodd-Frank Act directed the Federal Reserve to… Continue reading The Fed And Bank Regulation
Bloomberg Markets – BlackRock Has a Low-Cost Junk ETF to Rival Its Own Bond Behemoth Not content with running the world’s largest junk-bond exchange-traded fund, BlackRock Inc. is trying to entice investors with a low-cost alternative. The iShares Broad USD High Yield Corporate Bond ETF, which comes with the ticker USHY, will give investors exposure to junk-rated… Continue reading Blackrock Offers A Low-Cost Alternative To Compete With Itself
The Financial Times – Treasury rejects stress testing for asset managers The Trump administration has rejected the idea of subjecting asset managers to stress tests as it unveiled a series of pro-industry recommendations to make fund management oversight more “efficient and effective”. In a move that will be welcomed by fund managers, the US Treasury… Continue reading No Stress Tests For Asset Managers
Bloomberg – Rule-Based Monetary Policies Will Keep Volatility Low When central bankers are predictable, there tend to be fewer surprises for markets. The ECB follows the Federal Reserve, which this month started to shrink its $4.5 trillion balance sheet by reinvesting fewer proceeds from the bonds that it holds back into the market. Despite these… Continue reading Markets Not Accounting for Rising Central Bank Induced Risks
Bloomberg.com – Warsh vs. Quarles Feud Has Been Renewed by Trump Fed Search Quarles has questioned Warsh’s qualifications to lead Fed Officials have had disputes dating back to Bush administration Fed Governor Randal Quarles, who was sworn in this month as vice chairman of bank supervision, has told friends that he doesn’t think Warsh is qualified… Continue reading Trump’s Choices At Fed Governor Might Produce A More Independent FOMC