Would $100 billion a month from the Fed be a disappointment?
Will an emerging consensus on the Federal Reserve’s new program of quantitative easing take a little bit of “whoopee” out of stocks and shift the emphasis to individual corporate earnings reports. There’s been a consensus for a while that the Fed will soon announce a...Inflation barely present in September frees the Fed to move to buy billions in Treasuries
Friday’s inflation data put the last bit of icing on the quantitative-easing cake. Released on October 15, the CPI, the consumer price index, showed inflation slowing to just 0.1% in September after prices rose by 0.3% in August. The core CPI, which subtracts...Could reforming Fannie and Freddie wreck the Fed?
And now, fresh off passing the 2300-page Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress promises to address the “problem” of Fannie Mae and Freddie Mac. Be afraid. Be very afraid. Oh, not because Fannie Mae and Freddie Mac don’t need to be...Could we be looking at (another) global credit crunch as central banks step back from the markets?
The world is starved for credit. I know it doesn’t seem that way what with huge stimulus packages in 2009, massive expansion of the money supply in the United States, China, and Europe, and hand-over-fist expansion of the balance sheets at the U.S. Federal Reserve and...Time to rethink assumptions about interest rates–and income investing strategies
Reality has a nasty way of throwing investors’ assumptions onto the rubbish heap. Take this one: The massive stimulus packages, central bank interventions, and government budget deficits will lead to a surge of inflation and rising interest rates. That may still turn...China reverses another policy and starts new buying of U.S. Treasuries again
China’s decision to end a strict yuan-dollar peg is getting all the headlines today—even though the likely appreciation of the yuan versus the dollar is in the vicinity of 3% or so in 2010. That’s hardly a game changer. But the bigger China-U.S. news dates back a few...Could the Fed keep rates at 0% into 2012? Some at the Fed think it should
The Federal Reserve will hold its short-term interest rate target at 0% to 0.25% until 2012, according to a new research paper by economist Glenn Rudebusch. That’s a much longer delay than Wall Street now anticipates. Estimates there for when the Federal Reserve will...Euro crisis puts a U.S. interest rate increase in the deep freeze
Thanks to the euro debt crisis the Federal Reserve and the Chinese government are both likely to put tightening on hold. The Federal Reserve, which had been shrinking its balance sheet in preparation for an increase in its short-term interest rate target, now at 0% to...Treasury yields hit 4% but the climb looks very gradual from here
Yields on the 10-year U.S. Treasury note hit 4% yesterday for the first time since June. And I think yields will keep rising in the months ahead. But the United States is getting lucky. Thanks to the damage the Greek debt crisis has done to the euro, I think the rise...U.S. interest rates are rising–and 4% on 10-year Treasuries is in sight again
Have you noticed that long-term U.S. interest rates have been inching upwards even as the Federal Reserve holds its short-term target at 0% to 0.25%? Yields on the 10-year Treasury bond finished last week at 3.95% on Friday, April 2. That’s within an eyelash of the...Fed holds interest rates near 0% but continues to reduce role in the markets
Yes, the Federal Reserve’s Open Market Committee kept its interest rate target and language intact in today’s (March 16) statement: “The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic...The Fed is about to get less predictable–and that's not good
Just what we don’t need: Turmoil at the Federal Reserve. On March 1 Federal Reserve vice-chairman Donald Kohn announced that he would be stepping down in June. Kohn has been a key No. 2 to Fed chairman Ben Bernanke throughout the financial crisis. He led the stress...Are interest rate hawks pushing policy at the Federal Reserve?
Thursday’s Federal Reserve decision to raise the discount rate, the interest rate banks pay to borrow from the Fed, may not be the “no big thing” that chairman Ben Bernanke and the financial markets (so far) say it is. The minutes of the January 14 meeting of the...Markets decide Fed's discount rate increase is no big thing
The financial markets have bought it. The Federal Reserve’s move to increase the discount rate, the interest rate it charges banks to borrow money overnight, by 0.25 percentage points to 0.75% is part of “normalization” after the financial crisis and not a sign that...The Fed expects strong economic growth too
I guess that counts as a fat reed. Yesterday at 4:30 p.m. ET—just a minute after I posted my piece on thin reeds that argued that the U.S. economy was growing more strongly than many investors expected...So when will the Fed raise rates? The schedule gets even more confusing
What’s the actual difference in months between “an extended period” and “before long?” That’s what global financial markets are trying to figure out this morning after Federal Reserve chairman Ben Bernanke told the Financial Services Committee of the U.S. House of...Mr. Bond turns bearish on bonds
Mr. Bond, Pimco’s Bill Gross, doesn’t like bonds so much anymore. Gross, who manages the $200 billion Total Return Fund at Pacific Investment Management (Pimco) told CNBC on December 7 that Treasuries are over-valued given the odds that inflation and interest rates...Interest rates are rising even before the Federal Reserve moves
The march to higher U.S. interest rates is on. Oh, the Federal Reserve won’t increase short-term rates, the only ones it directly controls, for an “extended period” yet. I still think we’re looking at mid- to late-2010 before the Fed moves. Ben Bernanke and Company...Whoops! Either the Fed or the European Central Bank is wrong
The U.S, Federal Reserve and the European Central Bank are pursuing increasingly divergent economic policies. The policies are so divergent that it’s almost guaranteed that one or the other of these central banks is wrong. But the biggest worry is that the interaction...How long will interest rates stay low? Pay attention to what the Fed does and not just what it says
Have you ever played Three Card Monte? It’s a classic street con here in New York. All you have to do to win is guess which of three cards is the Queen. The dealer and his accomplices set up the mark with a fast shuffle, often on a cardboard box so that nothing...You may not like the fundamentals but this rally is headed higher
The test is over. And the stock market rally has passed. On November 16, the Standard & Poor’s 500 and the NASDAQ 100 both joined the Dow Jones Industrials in setting new recovery highs. In other words all three indexes have busted out of the trading range of 1025...Stocks and bonds take away different messsage from the Fed
Bonds and shares of financial companies didn’t like what they heard from the Federal Reserve Wednesday November 4 at 2:15. Investors and traders in general, on the other hand, were relieved that the Federal Reserve signaled that interest rate policy wasn’t about to...Where's the money? Despite the Fed, the money supply is falling
We’ve got a little problem in the economy. Tiny really. Nothing to worry about. Just that money supply is falling and that could endanger the entire economic recovery. The Federal government and the Federal Reserve are pumping money into the economy as fast as they...Ultimately, this stock market rally lives and dies on interest rates
So it’s a good thing when people such as Federal Reserve Vice Chairman Donald Kohn say that the Fed will keep interest rates near zero “for an extended period” as he did in a September 30 speech in Washington. As long as interest rates are so low, bond yields on...The Fed decided to go slow on removing housing stimulus–and that's a good thing
I heard what I was hoping to hear in yesterday’s statement from the Federal Reserve’ s Open Market Committee: the U.S. central bank isn’t going to cut back its support for the U.S. mortgage market ahead of schedule or abruptly. And that will keep...Will the Fed's news be good or bad for the dollar?
Inquiring minds want to know: Will all the moving parts in the Federal Reserve’s Open Market Committee press release of August 12 net out as good or bad for the dollar? The answer is important to more than just currency traders: the dollar is likely to be the...Wednesday is Fed day: Here's what Wall Street is hoping to hear
At a little after 2 p.m. on Wednesday August 12 the Federal Reserve will be either naughty or nice. From Wall Street’s perspective, anyway. Naughty, according to Wall Street, would be a press release that confirms the Fed’s view that the economy is in a...Inflation is coming no doubt but later than you'd think
To make money off inflation you need to get both the direction and the timing right. Get the direction wrong—buy gold, on a bet that inflation is climbing when inflation is actually falling, for example—and you lose money. Get the timing wrong—buy gold, again on a bet...Jim’s Daily Email Alerts:
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