SNB & CHF

On February 8, the Japanese yen fell to a 24-year low against the dollar, dropping to 143 yen per dollar. Not much has changed since then with the yen hovering between 142 and 144 per dollar. In September of 2021, one only needed 109 yen to buy a dollar. Overall, the yen has dropped 21 percent against the dollar over the past year, yet Japan’s central bank apparently has no plans to change course. Nor should we expect it to do so.  Japan’s debt load has become so...

Business travel commitments keep me from updating the blog until the weekend, but I wanted to share a few thoughts post-Fed. First, the Fed was more hawkish, and the median dot sees 125 bp increase in the target rate in Q4.  The hawkish thrust was also evident in projecting that the target rate will remain higher for longer.  Even in 2025 sees the target rate above the longer-term (neutral) level.   Second, the market still does not fully accept the Fed's message....

Inflation Did Not Create Recession Central Bank Jeff Snider Euro Dollar. This video was made with Pictory: https://pictory.ai/?ref=636lc Credit: @WTFinance https://www.youtube.com/watch?v=7MiY2TpKhRM&t=2034s DISCLAIMER : I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You (and only you) are responsible for the financial decisions that you make. This information is what was found publicly on the internet. This information could’ve...

Overview: Between Putin’s mobilization of 300k Russian troops and Fed Chair Powell expected to lead the central bank to its third consecutive 75 bp hike later today, the dollar rides high. It has recorded new two-year highs against the dollar bloc and Chinese yuan, while sterling was sent to new lows since 1985. Asia Pacific bourses were a sea of red for the sixth decline in the regional benchmark in the past seven sessions. Surprisingly, Europe’s Stoxx 600 is...

In recent years, Congress has attempted to add various new mandates to the Federal Reserve’s mission. In 2020, Democrats introduced the “Federal Reserve Racial and Economic Equity Act.”  Then, in 2021, pundits and politicians were telling us that it’s the Fed’s job to “combat climate change.” These are just the latest efforts to use the enormously powerful central bank to achieve political ends to the liking of elected officials. This is a helpful reminder, of...

Economic forecast: marked slowdown on the horizon The expert group on business cycles has significantly downgraded its expectations for Switzerland’s GDP growth to 2.0% for 2022 and 1.1% for 2023 (GDP adjusted for sporting events). After a positive first half of the year 2022, the Swiss economy now faces a deteriorating outlook. A tense energy situation and sharp price increases are weighing on economic prospects, especially in Europe.1 As expected, the Swiss...

The SNB announcement is due on Thursday at 0730 GMT. This in brief via Standard Chartered: expect SNB to hike by 100bp Stan Chart were at +50bp but have ramped their expectation much higher. Add that this takes: the base rate to 0.75% from -0.25%, and out of negative territory for the first time since 2014 More: We believe positive currency rhetoric from the SNB and increasing hawkishness among major central banks support our larger-than-consensus rate hike forecast;...

Free Market: The History of an Idea by Jacob Soll Basic Books, 2022; viii + 326 pp. Jacob Soll is a distinguished historian, and Free Market contains much of value, but the book cannot be considered a success, and indeed as it reaches the twentieth century, it becomes a disaster. Even in the parts of the book worth reading, Soll is in the iron grip of a central thesis, one that his historical approach by its nature makes impossible to prove. In some books, discerning...