(Note: This article also appears at econintersect.com) This week both the Bank of Japan and the Federal Reserve will be meeting to chart the future course of interest rates! In the U.S. where prior to the recent small interest rate hike ZIRP or zero interest rate policy had been in place, speculation over whether the Fed will raise or stand […]
In my first job as a municipal bond analyst and strategist a key datapoint to consider was the steepness of the yield curve! When the curve was at its steepest, investors would be ‘getting paid’ in the form of higher yields to assume the price and reinvestment risk of moving out to longer maturities. When flat, meaning […]
This morning Brent crude hit its lowest level since 2004 while West Texas Intermediate hasn’t had spot prices this cheap since about 2003 (see chart above)! Market experts are in general citing surging levels of crude supply with no appreciable decline in that supply anywhere on the horizon as the major reason for the price drop. A popular […]
The pundits on TV have all glommed onto the common argument that declining crude oil prices are responsible for declining stock prices! I, however, am of the opinion that declining crude coupled with the overall decline in the CRB, are merely symptomatic of a greater potential problem. That is the real possibility for the US economy […]
In other words when it comes to high yield bond spreads and the strength of the U.S. economy, is a nod as good as a wink to a blind man? Yesterday an article at the Hallmark Abstract Service blog spoke to the high-end real estate market in the United States and whether sales above a certain dollar […]
Will the Fed announce that it is raising rates a quarter point at the FOMC meeting that ends on September 17th, or will it stand pat? Inquiring minds want to know, particularly in some of the interest rate and economically sensitive sectors such as investments, banking, real estate and mortgages. But, as I conjectured in an […]
This is a question worth pondering particularly with the rampant speculation over what the Fed will do with interest rates this month! First the obvious thought, what is ZIRP? In a nutshell…’Zero interest-rate policy (ZIRP) is a macroeconomic concept describing conditions with a very low nominal interest rate, such as those in contemporary Japan and, […]
Confused? The Fed raising interest rates in order to be able to cut them at some point in the future is the rationale I am hearing on the business news! The reason is that if (when) the United States economy heads into another recession, the Fed will have ammunition available to be able to take proactive […]
If you are a business owner or entrepreneur is FEAR a permissible emotion? By virtue of the fact that you started your own business, are running a business or are in the process of bringing a new product or service to market, can fear of current and near-future economic conditions stand in your way as an […]
GDP reported this morning at an annual ‘growth’ rate of -2.9%! Last month when the Bureau of Economic Analysis (BEA) estimated that 1st-quarter GDP would actually drop 1% we asked the question whether the US economy was facing a condition that plagued George Costanza after swimming in a cold pool? In other words rather than expansion […]
