Investment Week (November 18)
The Fed’s “180-degree policy U-turn…from tightening to loosening interest rates” has “increased uncertainty about monetary policy.” Another factor exacerbating matters is “the unpredictable and escalating trade war between the US and China.” Combined, they have “resulted in a higher frequency of volatility spikes and some violent sector rotation.”
Tags: China, Fed, Interest rates, Loosening, Monetary policy, Tightening, Trade war, U-turn, U.S., Uncertainty, Unpredictable, Volatility
Forbes (October 28)
“Amid a global slowdown in economic growth that has seen central banks lower interest rates near zero or below in an effort to provide stimulus,” a number of “major economies are on high recession alert.” These include Hong Kong, the U.K., Germany, Italy and China. “Other highly stressed economies around the world include Turkey, Argentina, Iran, Mexico and Brazil.”
Tags: Argentina, Brazil, Central banks, China, Economic growth, Germany, Global slowdown, Hong Kong, Interest rates, Iran, Italy, Mexico, Recession, Stimulus, Stressed, Turkey, U.K.
Investment & Pensions Europe (October Issue)
“Interest rates in Japan have hovered around zero for about two decades. Since 2016, they have been negative.” Elsewhere, “the daunting prospects” of this phenomenon are only “starting to enter the collective consciousness of investors.” Other countries are now “watching as benchmark yields breach the zero level and stay there.” They may have much to learn from Japanese investors who “have lived through–and continue to manage investments–in this low rate environment.”
Tags: Benchmark yields, Consciousness, Daunting, Interest rates, Investors, Japan, Negative, Zero
Barron’s (September 12)
“Be careful what you wish for when calling for zero or negative interest rates, Mr. President.” There’s a downside and the results are not inspiring. “The record of negative rates in the euro zone, Sweden, Denmark, Switzerland, and Japan has been mixed…. While bond yields have fallen below zero, banks been reluctant to impose negative rates on depositors, resulting in a squeeze on their profits.”
Tags: Banks, Bond yields, Denmark, Depositors, Downside, EU, Interest rates, Japan, Negative rates, Sweden, Switzerland, Trump, U.S.
Bloomberg (June 10)
“Pity Europe’s banks. For years, they have been in retreat, losing business in their own back yards to Wall Street rivals. Now the battlefront is shifting – but what looks like an opportunity to gain ground may be just the opposite…. Shackled by sluggish economic growth at home and record-low interest rates that are crushing margins, European firms have been unable to compete with U.S. rivals in trading and capital markets. Those same dynamics look set to play out again in transaction banking,” which is set to displace fixed income as the largest revenue driver by 2020.
Tags: Banks, Battlefront, Capital markets, Economic growth, Europe, Fixed income, Interest rates, Margins, Retreat, Rivals, Trading, Transaction banking, U.S., Wall Street
Reuters (May 16)
“Years of heavy money printing by the BOJ have pushed down long-term interest rates near zero, adding to a squeeze on margins for Japan’s regional banks already suffering from a dwindling population and weak loan demand.”
Tags: BOJ, Dwindling population, Interest rates, Japan, Loan demand, Margins, Money supply, Regional banks
The Economist (April 13)
Though relatively new, Central Bank independence has become sweeping. “In a single generation billions of people around the world have grown used to low and stable inflation and to the idea that the interest rates on their bank deposits and mortgages are under control.” Increasingly, it looks like that independence may be a short-lived. Today, the success of central banks “is threatened by a confluence of populism, nationalism and economic forces that are making monetary policy political again.”
Tags: Bank deposits, Central banks, Independence, Inflation, Interest rates, Mortgages, Nationalism, Populism
Wall Street Journal (October 26)
The European Central Bank is now faced with “a dilemma as it edges toward higher interest rates just as the region’s economy slows and faces escalating risks, from international trade tensions to a European dispute over Italy’s budget.” For now, President Mario Draghi has no plans to change course as the ECB seeks to “phase out easy-money policies.”
Tags: Budget, Dilemma, Draghi, ECB, Economy, Interest rates, Italy, QE, Risks, Trade tensions
Wall Street Journal (August 23)
“The Fed has been able to slowly and predictably raise interest rates this year because the economy has performed largely in line with its expectations, but Wednesday’s minutes show how trade uncertainties loom large for U.S. businesses and Fed officials.”
Tags: Businesses, Economy, Expectations, Fed, Interest rates, Trade uncertainties, U.S.
The Guardian (August 9)
“The era of low interest rates will last for at least another 20 years, despite gently rising official borrowing costs in the coming years, one of the Bank of England’s leading policymakers has forecast.” Outgoing monetary policy committee (MPC) member Ian McCafferty said that “structural changes in the global economy meant UK borrowers and savers should get used to interest rates being “significantly” below the 5% average in the 10 years leading up to the financial crisis.”
Tags: BOE, Borrowing, Costs, Era, Financial Crisis, Global economy, Interest rates, Low, MPC, Structural changes, UK