Global Macro Perspectives
All the fuss yesterday was because of this: When these tools are used to drain reserves from the banking system, they do so by replacing bank reserves with other liabilities; the asset side and the overall size of the Federal Reserve’s balance sheet remain unchanged. If necessary, as a means of applying monetary restraint, the […]
“Exceptionally Low Federal Funds Rate For Extended Period” still here; FED funds rate stays at 0%-0.25% in 9:1 vote with Kansas City Fed President Thomas Hoenig voting again against. Economic activity picking up; high unemployment; business spending is recovering; housing relapse: Information received since the Federal Open Market Committee met in January suggests that economic […]
Equities In the macro arena we have leading indicators rolling over, and a stream of worse-than-expected data pieces on U.S. housing, U.S. employment, U.S. durable goods ordered and large move lower by consumer confidence. Seems that the markets do not appreciate the data. Things that move the markets are only FED policy on rates, dollar […]
We have clear roll over of leading indicators in recent weeks and a deterioration in housing, jobless claims, durable goods orders today and bad consumer confidence reading. Seems that the markets do not appreciate the data. Things that move the markets are only FED policy on rates, dollar strength and Greece debt problems. China credit […]
The important part: The FOMC continues to anticipate that economic conditions–including low rates of resource utilization, subdued inflation trends, and stable inflation expectations–are likely to warrant exceptionally low levels of the federal funds rate for an extended period. Full version.
I was on the road yesterday, so the usual service suffered… The most important piece of news yesterday was FED’s decision to increase the discount rate by 0.25%, to 0.75%. The measure has a marginal real impact on the banking sector, but it could have large psychological impact. The political and media orchestrated “recovery” pressures […]
Marvin King: It was at this press conference one year ago that I explained the asset purchase programme to you. That was at a time of sharply falling output and collapsing confidence. Since then, the position has improved considerably. Output has stabilised and confidence has recovered. The additional money created by the asset programme will […]
FED just released that the benchmark rate remains unchanged. The “extended period” is still here. Business conditions are improving but at subdued rate: Information received since the Federal Open Market Committee met in December suggests that economic activity has continued to strengthen and that the deterioration in the labor market is abating. Household spending is […]
The target rate remains the same; extended period phrase is here: The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels […]
U.S. GDP growth has got revised to 2.8% from previous estimate of 3.5%. Although the previous number (conspicuously high) helped to propel the market to new highs, revision doesn’t seem to raise any worries as U.S. equity futures are pointing on a higher opening. S&P/Case-Shiller Composite 10 edged higher 0.4% in September while &P/Case-Shiller Composite […]
Belisarius is overwhelmed with the work in his new company + he has traveled to Vienna yesterday, so he’s a little bit sidelined concerning the market action. I will post only a few interesting articles in last couple days. Trichet Says ECB Will Withdraw Liquidity Gradually, Bloomberg Fed Makes Monitoring Bank Capital Foremost Concern, Bloomberg […]
Ben Bernanke speech yesterday has win over the markets and the positive vibes were hitting the markets even today. Nothing special in the speech, both bulls and bears had their moments, but as bulls are currently in the lead the print was positive in all. Interesting, Mr. Bernanke admitted influencing stock markets: …Partly as the […]
Nothing new material in the statement. FED press release.
Higlihts:
Conditions in financial markets were roughly unchanged, on balance, over the intermeeting period. Activity in the housing sector has increased over recent months. Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales.
One of my favorite investment themes is shorting the long end of the treasury curve. Something similar (just a institutional version) are playing prominent investors (ex. and current hedge fund managers) like Julian Robertson, Jim Rogers, David Einhorn and others.
Noting much on the news front today. Mr. Bernanke speech yesterday stirred up the markets sending U.S. dollar up, and treasuries down. The rhetoric is unchanged, the highlight is that the FED is ready to tighten the monetary policy when the economy starts to recover. Bloomberg link: Bernanke Ready to Tighten When Recovery Sufficient.