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Reuters (February 15)

2024/ 02/ 16 by jd in Global News

“Japan’s journey back to normality has just taken an unwelcome turn. The world’s third-largest economy in U.S. dollar terms ceded the title to Germany on Thursday” as Japan simultaneously slipped into a recession. “More unnerving is a slew of weak data making it harder for the Bank of Japan to justify hiking rates and officially ending its era of ultra-easy monetary policy.”

 

Bloomberg (December 1)

2023/ 12/ 01 by jd in Global News

“For all the bullish milestones notched by November’s big market surge, recent history offers Wall Street a lesson in caution. Time and time again, speculation breaks out that the Federal Reserve is poised to ease monetary policy soon enough — spurring even cautious investors to erupt in a spasm of cross-asset buying. Stocks jump, bond yields fall, and a dash ensues among equity speculators into shady corners encompassing everything from meme fliers to crypto and profitless tech.”

 

Wall Street Journal (October 31)

2023/ 11/ 02 by jd in Global News

“Monetary policy officials are hinting to financial markets that the Federal Reserve will stop raising interest rates—even as the Fed signals that it is too early to declare victory over inflation. Wary investors can only speculate, while market analysts are happy to guess the Fed’s next move.”

 

Bloomberg (June 17)

2023/ 06/ 18 by jd in Global News

“European central bankers’ price stability mission is on a collision course with the goal of combating climate change, unless they change their ways.” Ultimately, the ECB may have to institute a special category of green lending to solve what appears to be an irresolvable dilemma. “The transition to a lower-carbon economy may fuel inflation — but raising interest rates in response to that could hinder investment in cleaner energy. So monetary policy and efforts to save the planet risk working against each other, casting a shadow over the prevailing consumer-price-targeting philosophy of the past three decades.”

 

Wall Street Journal (January 10)

2023/ 01/ 13 by jd in Global News

“Based on the growth of the money supply, Japan clearly fails to qualify as ultra-loose. On the contrary, it has been ultra-tight for decades.” Based on the quantity theory of money and Milton Friedman’s insights, “that tightness put Japan right where anyone… would expect: with ultra-low inflation.” That’s right, “Japan’s ultra-low inflation rates have been the result of ultra-tight, not ‘ultra-loose,’ monetary policy. The Bank of Japan’s attraction to this fallacy has resulted in Japan’s lost decades.”

 

Bloomberg (July 27)

2022/ 07/ 29 by jd in Global News

In unscripted remarks, Fed Chair Jerome Powell mentioned interest rates are at a “neutral level,” which is shorthand for “consistent with monetary policy being neither contractionary nor expansionary.” If rates really “are already at neutral. This would improve the chances of the Fed being able to soft-land the economy, thereby reducing inflation with limited damage to livelihoods and without triggering unsettling financial instability.”

 

Reuters (July 21)

2022/ 07/ 24 by jd in Global News

“Worries over a global slowdown are casting a shadow over Asia’s recovery prospects with factory activity growth slowing in Japan and Australia, keeping pressure on policymakers to support their economies while tightening monetary policy to combat inflation.”

 

Investment Week (July 14)

2022/ 07/ 17 by jd in Global News

“For the first time in over a decade, listed stocks and bonds are positively correlated. Combined with geopolitical tensions, record inflation and monetary policy shifts, investors are having to look further afield to achieve returns.” That has some investors looking at alternatives as “an effective diversifier that can be worked into a full portfolio.”

 

Financial Times (July 4)

2022/ 07/ 06 by jd in Global News

“If the BoJ sticks to its guns while the US Federal Reserve continues to raise interest rates, the yield divergence could spell a further collapse in the yen beyond the 24-year low. But if the BoJ moves to tweak its monetary policy, or if a global recession prompts a U-turn in US interest rates and a flight to safe havens, it could trigger an abrupt reversal.”

 

Institutional Investor (December 14)

2021/ 12/ 16 by jd in Global News

“Investors are proceeding with caution as central banks move to rein in inflation. Expectations of more aggressive monetary policy have prompted investors to adopt more defensive asset allocation strategies…. In addition to piling into cash, investors have also adopted more defensive positioning by overweighting healthcare stocks and underweighting assets that are exposed to interest rate hikes.”

 

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