No inflation to speak of, nothing to make the Federal Reserve change course
There was certainly no inflation to speak of in yesterday’s (December 15) consumer price data. The headline Consumer Price Index (CPI) climbed a scant 0.1% in November. The core inflation rate, which excludes food and energy prices, rose 0.1%. This puts the annual...The Fed says it will stay the course and bond yields keep moving up
Nothing surprising in the news from the Federal Reserve’s Open Market Committee yesterday. The Fed said its plans were unchanged and that it would buy $600 billion in Treasuries in the first six months of 2011 in order to stimulate the economy. The economy itself, the...Higher interest rates, lower bond prices–it's a new world
It’s a bond rout. On December 8, prices for U.S. Treasuries plunged and yields on the benchmark 10-year U.S. Treasury hit a six-month high of 3.33%. That’s a full percentage point higher than the October low. And it’s a shocking 0.76 percentage points above the yield...Inflation rages ahead in China, rising 5.1% in November: So where's the action from Beijing?
Bad news from the consumer price inflation numbers released in China on December 11. Inflation not only climbed in November from October’s already too-high 4.4% annual rate but jumped to a 5.1% pace. That’s well above the 4.7% rate that economists surveyed by...Trying to figure out how long the U.S. has to get its financial house in order? History says longer than you think but not forever
The world has a fair deal of experience in dealing with small countries that can’t pay their bills. And the world is gaining more experience by the minute. Greece can’t pay its bills? Put together a funding package that comes at the price of domestic austerity and...Shanghai stock market falls on speculation that another interest rate increase is on the way–soon
On the Shanghai stock market it’s time to play “Can you guess what the government will do next?” As fans of this ever popular game know, the point is to guess what market roiling move Beijing plans next and then by buying or selling to get your portfolio positioned to...With inflation on a run, the Chinese are buying gold too
China has treated data on the country’s level of gold imports as a state secret—until last week. And the newly public data shows that China is on a path that would have the country overtake India as the world’s largest consumer of gold. Think this might be bullish for...In Brazil's inflation fight January actions will speak louder than December words
Brazil’s President-elect Dilma Rousseff would like to convince the financial markets that she’ll keep her promise, made in her October 31 victory speech, to cut taxes, reduce government spending, and control inflation. Her two top financial appointments so far send a...News on faster growth for China isn't good news in the long run
Right now faster than expected growth in China isn’t a good thing. Not in the long run anyhow. Investors in China get it even if the rest of the world’s markets still stand ready to cheer as they did yesterday. That’s because every bit of extra growth raises fears...Inflation hits Brazil hard, raising odds that interest rates will be headed to 12% in 2011
Just what investors need. Another economy and financial market to worry about. Now it’s Brazil. Although compared to the European debt crisis, this worry should be filed under “fret” rather than “panic.” Consumer inflation in Brazil jumped at an annual rate of 5.2% in...Can Beijing fix its run-way bank lending problem? Does it really want to?
Important math yesterday, November 22, by the Financial Times’s James Kynge, the paper’s long-time China correspondent and author of the book China Shakes the World. Kynge notes that the official new bank loan total so far for 2010—a daunting 6.9 trillion renminbi in...China raises bank reserves again–another increase in benchmark interest rates can't be far behind
If at fourth, you don’t succeed in slowing inflation, bank lending, and growth in the money supply, try a fifth increase in bank reserve requirements. Today, November 19, the People’s Bank of China announced that banks would have to increase the money they keep as...Prices for 7- to 10-year Treasuries fall–if that's a trend expect money to start flowing back into stocks from bonds
For most of 2010 Treasury bonds have been a very good investment. Sure, they haven’t paid much in interest but with yields falling, Treasury bond prices have been climbing. And so the gain on the iShares Barclay 7-10 Year Treasury ETF, which tracks the price of seven...So exactly how serious is Beijing about slowing China's economy?
Have China’s biggest banks been banned from making further loans to property developers this year or not? The answer isn’t just of interest to real estate developers and investors who hold their shares. Lending policy in this sector is a good indicator of how serious...Core consumer price inflation is still on track for 0%
Inflation at the consumer level was nowhere to be seen in October. The CPI, Consumer Price Index, edged upward by 0.2% for October. In September the CPI climbed 0.1%. Economists had been projecting a 0.3% increase for October. Core inflation, that’s inflation...China gets the worries big time over inflation fixes
The news is that China’s government is drafting policies to fight inflation. Chinese Premier Wen Jiabao said so on November 15 from a supermarket in Guangzhou. The comments were broadcast on state TV so they count as solid news. The rumor is that China’s central bank...Inflation continues to accelerate in China, hits 4.4% in October
Those economists and traders who thought that the November 10 increase in the reserve requirement for China’s banks was a sign that inflation in October had soared have turned out to be absolutely correct. But too conservative. After the People’s Bank of China raised...Buy Silver Wheaton (SLW)
Silver is cheap. Well, it is when compared to gold anyway. On Friday morning gold hit $1397.70 an ounce, an all time high. (If you don’t correct for inflation.) Silver, on the other hand, moved up to $26.90 an ounce. That’s just a 30-year high. See, cheaper. You...Even before the Fed acts, the long bond is signalling rising inflation worries
Something odd is happening in the bond market on the way to the Federal Reserve’s second program of quantitative easing: Interest rates at the long end of the Treasury market have started to rise. From one perspective this is counter-intuitive. The Fed is about to...Better than TIPS? 3 stocks with inflation protection and a positive yield too
This week investors bought $10 billion in Treasury Inflation-Protected Securities (TIPS)—and paid for the privilege of lending the Federal government money. Investors paid $105 for each $100 in face value. That reduced the yield on these bonds to a negative 0.55%....Inflation numbers send Shanghai market into reverse (but down this time)
Good news plus bad news on China’s economy added up to bad news for China’s stocks today, October 21. The good news was that China’s economy grew at an annual rate of 9.6% in the third quarter. That was slightly ahead of the 9.5% that economists surveyed by Bloomberg...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...Inflation pauses in Brazil and so does the central bank; look for that to keep Brazil's economy cooking
Inflation is falling in Brazil. Through for the 30-day period through mid-August consumer inflation was just 4.44%. That’s the first time since January that inflation has been below the government’ target of 4.5%. Now the question is How long will the improvement...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...Inflation is everywhere–except in China's official consumer inflation numbers
In the first quarter China’s economy grew at an annual rate of 11.9%, according to official statistics released today, April 15. Economists surveyed by Bloomberg were expecting growth of just 11.7%. Remember the days when investors worried that a 10% growth rate would...Brazil joins China on the road to higher inflation–and higher interest rates
China isn’t the only developing economy facing inflation pressures. Economists are projecting that consumer price inflation in Brazil will hit an annual rate of 5.2% this year. That’s well above the government’s target of 4.5%. The central bank is expected to start...Tomorrow's GDP report will add to fears of inflation in China
Sneak preview on China’s first quarter GDP and March inflation from Reuters today, April 14. China’s economy grew about 11.9% in the first quarter from a year earlier, unofficial numbers available in Beijing say according to Reuters. That would be above even the...China takes another step toward fighting inflation, ending its currency peg
The People’s Bank of China, the country’s central bank, will sell three-year bills for the first time since June 2008. The sale is a likely precursor to either an increase in official interest rates by the central bank or an end to the renminbi/dollar currency peg. In...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...Jim’s Daily Email Alerts:
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