Markets continue hoping that rate cuts are close while central banks remain happy to oblige them, without actually delivering the goods. Fed chairman, Jay Powell, said it was not far from gaining confidence that inflation is trending to target and that cuts would likely be appropriate later this year. Not for the first time, the…
The U.S. Federal Reserve maintained interest rates at a 23 year high of 5.25% – 5.50%. However, Chairman Jerome Powell didn’t think it likely easing would commence in March, as many assumed previously. The Bank of England’s statement was not dissimilar in tone as it maintained its benchmark rate of 5.25%. It was the same…
Stock markets have reacted badly to inflation figures from the U.K., U.S. and Eurozone. We’ve commented previously about the groupthink that now infests central banks and policy makers, in general. A cozy consensus was emerging that falling inflation would pave the way for rate cuts but inflation, while sharply lower over the past 12 months,…
12 months ago, Federal Reserve Chairman Jay Powell, noted “The question of when to moderate the pace of increases is much less important than the question of how high and how long to keep monetary policy restrictive”. At the time, U.S., UK and Eurozone rates were 4%, 3% and 2.5% respectively. After their December 2023…
At its November meeting, the U.S. Federal Reserve maintained interest rates within a 5.25% – 5.50% range. The Bank of England did likewise, keeping its key rate at 5.25% while the European Central Bank (ECB) also opted to maintain the status quo at 4.0%. Not for the first time, we are left wondering why they…
Will interest rates stay higher for longer? The rise in global bond yields suggests that’s the way investors are leaning. Central banks, having been wholly ignorant of inflationary dangers, now have a serious credibility problem with regard to getting it back under control. Their only remaining policy option is to hike interest rates which is…
Ex the United States, the global economy increasingly looks stuck in a low growth orbit and even the U.S. cannot continue deficit spending 8% of its annual gross domestic product without serious consequences. One may conclude the Federal Reserve’s hiking of interest rates from virtually zero to more than 5%, over an 18 month period,…
The Bank of England (B of E), U.S. Federal Reserve (Fed) and European Central Bank (ECB) all raised benchmark rates by 0.25% in order to tame inflation that remains substantially above target in all three territories. In the B of E’s case, it was the 14th consecutive increase, a damning indictment of its ineptitude by…
Federal Reserve (Fed) minutes from its last meeting suggested interest rates were likely to rise further in 2023 although at a slower pace. After 10 consecutive increases, June witnessed a pause in tightening. In the Eurozone, service and manufacturing output weakened while its strongest economy, Germany, entered recession. China continued to send mixed messages but…
Was it a surprise the U.S. debt ceiling was raised? Of course not; there was only going to be one ending to this theatrical stand off and Biden was always going to get his money. Of course, the real issue is when will the U.S. (and the Western world in general) get its house in…