Central Bank Watch
Fed Statement As Expected
December 16, 2009
Analysts weren’t looking for any remarkable initiative in the FOMC statement, and that’s what they got. Economic conditions are better from the standpoint of the employment situation, income growth and financial market conditions, but officials reiterated that “exceptionally low levels of the federal funds rate” are likely “for an extended period.” I’d bet this pretty […] More
Deeper Analysis
How the Third-Quarter U.S. Current Account Deficit Was Funded
December 16, 2009
The $108.0 billion current account deficit in 3Q09 equaled 3.0% of GDP, similar to the ratios of 2.8% in 2Q09 and 2.9% in the first quarter but well below a deficit equal to 5.1% of GDP a year earlier. The value of the deficit was $10.1 billion or 10.3% wider than in the second quarter. […] More
Central Bank Watch
Vital Market Prices at the Time of Prior FOMC Meetings
December 16, 2009
The FOMC is not expected to change its Fed funds target, nor is the conditional guidance that “exceptionally low rates for and extended period” likely to get modified further. The last statement of November 4 made news by imposing three conditions to that pledge: low resource utilization (which can be determined from the jobless rate […] More
Central Bank Watch
Norwegian Central Bank Tightens
December 16, 2009
Norges Bank officials also surprised most analysts, only they raised rates whereas Czech monetary officials cut them today. This disparity underscores the transitional nature and uneven properties of the world business cycle as analysts await the results of the Fed’s last meeting of 2009 to be announced in less than 3-1/2 hours. Norway’s central bank […] More
Central Bank Watch
A Surprise From the Czech Central Bank
December 16, 2009
By a narrow 4-3 vote, monetary officials in the Czech Republic voted to reduce the key two-week repo rate and the Lombard rate each by 25 basis points to 1.0% and 2.0%, respectively. Most analysts were not anticipating a further ease in light of higher-than-expected November CPI results that swung the on-year inflation rate from […] More
Central Bank Watch
No Change in Swedish Monetary Policy
December 16, 2009
As analysts predicted, the Riksbank repo rate was left at 0.25%, and the projected future path of that rate was also not changed. That forecast anticipates no increase in central bank rates until the final quarter of 2010 and a subsequent climb to 2.4% by 4Q11 and 4.1% in 4Q12. Quantitative easing in via fixed […] More
New Overnight Developments Abroad - Daily Update
Focus on Fed and Other Central Banks
December 16, 2009
The dollar is mixed as markets await the FOMC statement around 19:15 GMT today. No rate change is expected. A change in language on future rate guidance also seems unlikely, but modifications will be made in economic assessment and possibly comments about unconventional stimulus. The dollar is up 0.7% against the Australian dollar and 0.4% […] More
