FOMC
Pundits Digesting Nuances of Signals from the Fed, Bank of Japan and ECB
August 31, 2010
Among the most telling comments in the August FOMC minutes is the sentence, “Members generally saw both employment and inflation as likely to fall short of levels consistent with the dual mandate for longer than had been anticipated.” Often with a mandate to maintain price stability but also maximize jobs, there is a conflict with [...] More
A Middle-of-the Road Action from the Federal Open Market Committee
August 10, 2010
The Fed did not decide to expand its balance sheet, which isn’t surprising given the political brouhaha over its sharp rise during the severe recession. A passive decrease in the central bank asset holdings as security holdings mature is likewise not being allowed. A third decision to fortify the quality of the balance sheet was [...] More
Softer Chinese Data on FOMC Day
August 10, 2010
Stocks in Asia and Europe got walloped by Chinese data, slumping 2.9% in China, 1.5% in Hong Kong and Thailand, 1.3% in Pakistan, 1.2% in Australia, 0.9% in France, 0.8% in Indonesia and Germany, 0.5% in South Korea, Great Britain, and Spain, and 0.4% in India and Singapore. Japan’s Nikkei only edged 0.2% lower. The [...] More
German and Japanese Growing at Vastly Different Speeds
August 9, 2010
Monday has seen Asian and European equities move impressively higher, but the trend was not shared by Japan. While the Nikkei lost 0.7%, stocks advanced 0.9% in Taiwan, 0.7% in India, Indonesia, and China, 0.6% in Australia and Hong Kong and 0.4% in South Korea. The Paris Cac, British Ftse, and German Dax are up [...] More
Raising Very Low Central Bank Rates Easier Said Than Done
July 15, 2010
Having followed Bank of Japan policymaking since before Japan’s financial crisis, I was suspicious when consensus forecasts surfaced several months ago that the Fed funds rate would rise later this year. I’m even doubtful about 2011. A U.S. recovery had begun after mid-2009, and GDP growth accelerated to a 5.6% annualized pace in 4Q09 and [...] More
Awaiting U.S. Retail Sales and FOMC Minutes
July 14, 2010
From a high of 88.02/USD, the yen had lost 0.7% by yesterday’s close, but it did not retreat further overnight. The dollar is also unchanged against the Aussie dollar and Chinese renminbi. The greenback has fallen 0.6% against sterling but shows gains of 0.3% against the Swiss franc, 0.2% versus the kiwi and Canadian dollar, [...] More
FOMC
June 23, 2010
One source of the dollar’s strength against the euro since late November has been a perception that the Fed will begin raising interest rates well ahead of the ECB. If this premise were prescient, it should only be meaningful from a market standpoint if the onset of Fed tightening were six to nine months away. [...] More
Market Quotes at Previous FOMC Meetings
June 23, 2010
In response to concerns about tighter Chinese policies and Europe’s sovereign debt problems, the global environment looks riskier than when the FOMC last met in late April, and that cloud is reflected in market movements over the past eight weeks. The 10-year Treasury yield declined 63 basis points. The last time when the FOMC met [...] More
U.S. Unemployment, CPI Inflation, Stock Prices and Fed Policy
May 19, 2010
Although somewhat more upbeat about economic prospects in the United States, minutes released today from the April 28th FOMC meeting depict a hesitancy to raise interest rates soon or to sell off mortgage-backed securities before rates have begun their lift-off. On several criteria, markets that are pricing in a one in three probability of a [...] More
Market Levels When the FOMC Has Met Before
April 28, 2010
The high state of alert among investors over Greece’s fiscal problems and the risks of contagion to other markets seemingly will prevent the Fed from modifying language predicting “exceptionally low levels of the federal funds rate for an extended period of time.” A further upgrade of the assessment of economic conditions seems likely but continues [...] More
