Tag Archives: Federal Reserve

There was a reason why we warned readers two days ago that "The World's Central Bankers Are Gathering At The BIS' Basel Tower Ahead Of The Brexit Result": simply enough, it was to facilitate an immediate response when a worst-cased Brexit vote hit. And that is precisely what has happened today in the aftermath of the historic British decision to exit the EU. It started, as one would expect, with Mark Carney who said the Bank of England is ready to pump billions of pounds into the financial...

Submitted by Danielle DiMartino Booth via DiMartinoBooth.com, “Kings have long arms, many ears, and many eyes.” So read an English proverb dated back to the year of our Lord 1539. And thus was born an idiom that today translates to the very familiar Long Arm of the Law. It stands to reason that such a warning was born of feudal times when omnipotent and seemingly omnipresent monarchs personified the law, possessed...

Summary There is much to like in Bullard’s new paradigm. The problem is that it does not reflect the Federal Reserve’s view or approach. Policy emanates from the Fed’s leadership, but be confused by the noise. The dot plot the recent FOMC meeting was curious.  We noted right away that inexplicably there was one official that apparently anticipated one hike this year and then no hikes in 2017 or 2018.  There was...

As the “deflationary supernova” sweeps across the world, dragging bond yields to zero-and-beyond, even the almighty omniscent Federal Reserve has been forced to capitulate as the ‘cheapness’ of Treasury bonds lures the world’s yield-hunters dragging it ever closer to the negative rate realities of Switzerland, Japan, and Germany. As rate-hike odds collapse, along with The Fed’s credibility, so investors are...

The Federal Reserve modified its stance yesterday without changing rates.  It is not just about how fast the Fed sees itself normalizing monetary policy but also where the level of the equilibrium rate. The FOMC statement, but especially the officials’ forecasts (dot plots) effective unwound the impact of the earlier Fed talk of the likely appropriateness of a rate hike this summer.  Although the Fed did not rule out a...

Swiss Franc The Swiss Franc was today on the back-foot against the euro, while the FOMC helped him to rise against the dollar. Yesterday Swiss producer prices were published. Negative changes in producer prices in 2015 reduced  the Swiss franc overvaluation in terms of the Real Effective Exchange strongly. Now, however, changes producer prices are approaching zero again. FOMC The FOMC meeting later today,...

The Federal Reserve anticipated a more gradual tightening path going forward. This weighed on the dollar and lifted equities. August Fed funds futures implies less of a chance of a hike next month. It is now consistent with an 8% chance of a hike, which is less than half the probability assigned at the end of last week.The immediate reaction was driven by the Fed’s dot plots.  Although the median continues to...

Within the world of central bank and government gold reserves, there is often an assumption that these gold holdings consist entirely of gold bullion bars. While this is true in some cases, it is not the fully story because many central banks and governments, such as the US, France, Italy, Switzerland, the UK and Venezuela, all hold an element of gold bullion coins as part of their official monetary gold reserves. These...

The most important element in next week’s FOMC meeting may come from the dot plot and whether Fed officials back away from the two hikes thought appropriate in March. When looking the schedule of FOMC meetings, and understanding that when the Fed says “gradual” to describe the normalization process, it does not mean hiking at back-to-back meetings, seeing two hikes this year without a summer move is difficult. After...

After yesterday's US and UK market holidays which resulted in a session of unchanged global stocks, US futures are largely where they left off Friday, up fractionally, and just under 2,100. Bonds fell as the Federal Reserve moves closer to raising interest rates amid signs inflation is picking up. Oil headed for its longest run of monthly gains in five years, while stocks declined in Europe. Treasuries retreated in the first full day of trading since Yellen said late Friday that the improving...