Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.Friday, November 06, 2015
Bill Gross: '100% Chance' Fed will Raise U.S. Interest Rates in December / Interest-Rates / US Interest Rates
Bill Gross of Janus Capital spoke with Bloomberg's Tom Keene and Michael McKee on Bloomberg Radio and Television this morning to respond to today's jobs report.
Gross said there is a "100 percent chance" the Fed will raise interest rates in December after jobs surged. "They're ready to go." He said: "100 percent that they go in December and then try and tamp it down with mild, gradual language that will keep the dollar from strengthening even further."
On dollar strength, Gross said: "I think the Fed fears it...They took it out of their statement last month. But prior to that, they were cognizant of the fact that a very strong dollar has negative implications for emerging markets... It's certainly a negative for the global financial system because there are many bets and much dollar denominated debt in terms of emerging market corporations and sovereigns will be impacted by this."
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Friday, November 06, 2015
Worlds Largest Debtor Ever Raises U.S. ‘Debt Ceiling’…Again / Interest-Rates / US Debt
The US government has once again agreed to increase it’s so-called debt “ceiling” – this time from $18.5 trillion to $20 trillion. The so-called debt ceiling is recognized industry-wide as a complete misnomer.
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Thursday, November 05, 2015
The Bank of England Keeps Interest Rates at 321-Year Lows / Interest-Rates / UK Interest Rates
We hear constantly from the U.K. government and mainstream publications like the Financial Times that the economy of Great Britain is recovering strongly and that the labour market is robust so it is probably surprising for many people that in spite of the strong growth in the U.K. economy that the Bank of England has kept its base rate at 0.5%. This almost zero interest rate has been kept since March 5th, 2009 when the MPC or Monetary Policy Committee cut the base rate from 1% to 0.5% and at the time it was understandable as the U.K. financial system was on the brink of a total meltdown and the U.K. government had to write a cheque and issue loan guarantees for £500 billion to bail out the big banks.
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Tuesday, November 03, 2015
QE's Creeping Communism / Interest-Rates / Quantitative Easing
Most economists and investors readily acknowledge that the current period of central bank activism, characterized by extended bouts of quantitative easing and zero percent interest rates, is a newly-blazed trail in economic history. And while these policies strike some as counterintuitive, open-ended, and unimaginably expensive, most express comfort that our extremely educated, data-dependent, central bankers have a pretty good idea as to where the trail is going and how to keep the wagons together during the journey.
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Monday, November 02, 2015
Global Fiscal and Monetary Madness / Interest-Rates / Quantitative Easing
Last week China’s central bank (the PBOC) cut borrowing costs for the sixth time in a year and eased the reserve requirement ratio (RRR) for the third time this year, in a desperate attempt to achieve the prescribed growth target of 7% off the back of ever-increasing credit issuance. The PBOC lowered the one-year benchmark bank lending rate by 25 basis points to 4.35%, the one-year benchmark deposit rate was also lowered by 25 basis points to 1.5%.
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Friday, October 30, 2015
Fed’s US Debt Bomb and Interest Rates / Interest-Rates / US Debt
With the Federal Reserve’s first rate-hike cycle in nearly a decade looming, traders are working overtime trying to divine its timing and impact on the markets. They are closely monitoring the same employment and inflation data the Fed will use to start tightening. But there’s another little-discussed concern for the Fed, the solvency of the US government. The Fed’s zero-interest-rate policy has spawned a grave US debt bomb.
Back in late 2008, the US stock markets suffered their first true stock panic since 1907. This once-in-a-century fear superstorm proved catastrophic. In a single month leading into October 2008, the flagship S&P 500 stock index plummeted 30.0%. Over 6/7ths of these losses happened in 2 weeks, a massive 25.9% cratering! That exceeded the threshold for a stock panic, which is a 20%+ plunge in a couple weeks.
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Tuesday, October 27, 2015
Fed Headed into Inflation Overdrive / Interest-Rates / US Federal Reserve Bank
Seven years of extraordinary fiscal and monetary stimuli are proving ineffective towards achieving the growth and inflation targets laid out by the Federal Reserve. The Consumer Price Index (CPI), the Producer Price Index (PPI) and Gross Domestic Product (GDP) have all failed to grow over 2%. This is because asset prices, at these unjustified and unsustainable levels, need massive and ever increasing amounts of QE (new money creation) to stave off the gravitational forces of deflation. Fittingly, it isn't much of a mystery that the major U.S. averages have gone nowhere since QE officially ended in October of 2014.
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Friday, October 23, 2015
ECB Putting Federal Reserve in a Bad Spot / Interest-Rates / ECB Interest Rates
Friday, October 23, 2015
Europe Admits QE Has Failed, Promises More Of It / Interest-Rates / Quantitative Easing
New Age monetary policy has begun to resemble the form of insanity in which a patient repeats the same behavior while expecting a different outcome.
Throughout the developed world, interest rates are at record lows and central banks continue to pump out newly-created currency. Yet growth remains tepid, inflation is nonexistent and debt of every type continues to mount. And instead of recognizing that somewhere in their guiding theory lurks a fatal flaw, governments and central banks just keep upping the ante. Today it was Europe, where central banks have been expanding their balance sheets (i.e. running the printing presses) aggressively…
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Wednesday, October 21, 2015
Insane “Trillion Dollar Platinum Coin” Option Ruled Out By U.S. Treasury To Avert New Debt Crisis / Interest-Rates / US Debt
The silly and somewhat insane uber Keynesian “Trillion Dollar Platinum Coin” appears to be now firmly off the table.
The US Congress has once again ruled out the possibility of issuing a “trillion dollar platinum coin” floated as a possible solution to the looming US Debt Crisis.
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Friday, October 16, 2015
Can the Fed Really Print Money? What Would Negative Interest Rates Do? / Interest-Rates / US Interest Rates
Most people believe the Fed can print money. Caught on tape, former Fed chair Ben Bernanke once admitted the Fed prints money.
However, in Hoisington's Third Quarter 2015 Review, economist Lacy Hunt makes the claim the Fed cannot print money. Let's take a look, emphasis mine.
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Thursday, October 15, 2015
What the 'Junk-Bond Crisis' Means for Muni Bonds / Interest-Rates / International Bond Market
Dr. David Eifrig writes: It could happen next week... or next month...
Wednesday, October 14, 2015
US Interest Rate Hike Odds For March 2016 Fall Below 50% / Interest-Rates / US Interest Rates
3rd Quarter GDP Forecast Slips to 0.9%
Following today's retail and business sales reports, the Atlanta Fed GDPNow Forecast for third quarter GDP slipped 0.1 percentage points to 0.9%.
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Tuesday, October 13, 2015
Brainard's Wake-up Call to Fed on U.S. Rate Hike Calls / Interest-Rates / US Interest Rates
The growing inverse correlation between the frequency of Fed speeches and uniformity of the message on monetary policy action cannot be ignored. The newest member of the Federal Reserve Board of Governors hasn't made too many speeches, but her message has been on point since her first speech in June.
In her speech yesterday, Lael Brainard, Federal Reserve Governor since June of this year, dealt a prominent blow to the hawks at the Fed, by contradicting three major premises upon which calls for a 2015 rate hike are built. Having served as Undersecretary of the Treasury for International Affairs for over three years, she knows a few things about international developments. Here are some of the central points of her speech:
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Tuesday, October 13, 2015
The Mindless Stupidity of Negative Interest Rates / Interest-Rates / US Interest Rates
MoneyMorning.com By Lee Adler, Editor's Note: We're sharing this Wall Street Examiner column with you today because negative interest rates are destroying trillions of dollars in wealth in Europe right now, cheered on by some of the "smartest" economists in the world – who want to bring NIRP here. Here's Lee Adler with some facts that show why negative rates are a horrible idea…
There are troubling signs that the doves at the Federal Reserve are considering a negative interest rate policy (NIRP) as a way to handle "the next crisis" – and there's always a next crisis…
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Monday, October 12, 2015
Move over ZIRP... Here Comes NIRP! / Interest-Rates / US Interest Rates
Precious metals prices enter the new week looking to extend the rally that began Oct. 2nd. Silver has gained nearly 10%, and gold is up almost 3.5%. The notion that the Federal Reserve governors may have missed their window to raise interest rates is beginning to sink in with investors.
In fact, if the U.S. economy should fall into recession, investors may see central planners move from zero interest rate policy (ZIRP) to the launch of negative interest rates.
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Monday, October 12, 2015
IMF Fears $3 Trillion Credit Crunch; Lagarde Warns 'IMF Credibility at Stake' / Interest-Rates / Global Debt Crisis 2015
IMF head Christine Lagarde says "IMF credibility is at stake". She blames the US for that development, and calls on US to give more voting power to China to solve the problem.
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Sunday, October 11, 2015
Negative Interest Rates Tantalizing Stupidity and the Case for Gold / Interest-Rates / US Interest Rates
Financial Repression Insanity
Purportedly the Fed is ready willing and able to go to next step of financial repression insanity.
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Thursday, October 08, 2015
What Trump and Other Pessimists Don’t Understand About U.S. Debt / Interest-Rates / US Debt
Alexander Green writes:I received still more blowback from my last few columns about Donald Trump and the economic pessimists.
Some readers are in no mood to hear anything positive about the state of the country or our current economic situation.
Others realize that the economy is growing, the dollar is strong, inflation is low, American corporations are reporting record profits and U.S. household net worth just hit an all-time high.
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Wednesday, October 07, 2015
Summers Grades Janet Yellen's Fed Performance 'Incomplete' / Interest-Rates / US Federal Reserve Bank
Former Treasury Secretary Larry Summers joined hosts Stephanie Ruhle and David Westin on Bloomberg TV's new flagship morning program, Bloomberg <GO>. He discussed the economy, the 2008 financial crisis, and Janet Yellen's job performance as Federal Reserve Chair.
On what grade he would give Janet Yellen, Summers said: "I'd give her an incomplete because the term is not yet over. But she's done, as I say, I've got great respect for Janet Yellen."