Tag Archives: World Affairs: Features

The Federal Reserve’s long-anticipated rate hike yesterday –its first in 10 years — came amid worry from some that moving the federal funds rate up from zero could slow U.S. economic growth. The U.S.’s underwhelming post-financial crisis recovery provides some support for that pessimism: nominal GDP growth has averaged just 3.75 percent despite the benefit of a near-zero interest rates, a long-depressed dollar and a dropping unemployment rate. Might the situation turn...

Enough talk already. The moment is finally here: The Federal Reserve raised interest rates today by 0.25 percent for the first time since June 2006. Credit Suisse doesn’t believe the small, well-anticipated hike will hurt the U.S. economy in and of itself. (What happens in rate-sensitive markets, especially high-yield bonds, is another story, and one that The Financialist will cover in the coming days.) More important to financial markets are the signals Federal Reserve Chair Janet Yellen...

While the European Central Bank announced tamer-than-expected quantitative easing measures this month, it also offered a bit of reassurance to those counting on a broader QE program: bank president Mario Draghi said that the ECB was prepared, if necessary, to implement further easing. But is more easing actually likely in the coming year? Credit Suisse believes the answer is “no.”   To understand why, it’s important to look at what might have prompted the bank to...

On November 30, the International Monetary Fund invited the renminbi to join the pound, euro, U.S. dollar, and yen in an exclusive club of international reserve currencies starting in October 2016. China has been working to make its currency a credible global player for at least two decades, and the nod from the IMF is a significant symbolic victory. Still, don’t expect central banks to scoop up mass quantities of renminbi just yet.   Central banks currently hold only about one percent...

The same, only more of it. That’s the kind of year 2016 promises to be, according to Credit Suisse’s Global Markets annual outlook. Markets will obsess over if, when, and how much the Federal Reserve will raise interest rates. (Four times starting in December for a total of 1 percentage point, says Credit Suisse.) Credit Suisse’s Global Markets team believes global economic growth will pick up, driven by improvement in the U.S. and Europe, central bank policy will diverge further, and...

In July, six months after Greece elected a left-wing, anti-austerity government, the country came perilously close to leaving the euro. So it’s easy to understand why markets are nervous at the prospect of Portugal, a poster child for European austerity, replacing its reform-friendly, center-right government with a left-wing, anti-austerity coalition. The yield on 10-year Portuguese government bonds jumped 53 basis points to peak at 2.83  percent on November 9 since the ruling Social...

The November 13 terrorist attacks in Paris claimed 129 lives and are changing the political climate in France and Europe. One thing they haven’t done, however, is roil financial markets. Both the Stoxx 50, Europe’s blue-chip index, and France’s benchmark CAC 40 index were up 2.1 percent in the first three days of trading after the attacks.   Certain sectors – airlines, hotels, luxury goods, and financial stocks – took a hit on the Monday after the attacks. Even within these sectors,...

Real GDP growth in the U.S. wasn’t particularly impressive in the third quarter –the 1.5 percent annualized increase came in just shy of the 1.6 percent consensus forecast and way down from the 3.9 percent reading in the second quarter. A look at the components of GDP growth, however, reveals a very positive signal for the future: Consumer spending has been the biggest contributor to GDP in recent quarters, and American consumers are spending enough to make up for stagnating exports and...

Argentinian voters blew their country’s presidential race wide open on October 25 with an unexpectedly close vote that will force the country’s first-ever runoff election on November 22. But the victor of that contest will receive a dubious prize: Argentina’s next president will have to deal with a stalled economy, dwindling foreign exchange reserves, an overvalued currency, and a large budget gap.   Polls conducted just before the recent vote suggested that Daniel Scioli, who served...

How wealthy has China become? At last count, the country accounted for a full 8 percent of all global ultra-high net worth investors—those worth more than $50 million. What will those UHNWIs do with that newfound wealth? That’s an important question, because household wealth is a key driver of consumers’ consumption and investment decisions as well as entrepreneurial activity, and that holds true whether one is Chinese, American, or otherwise.   China and the United States led the...