Financial Times (February 10)
“The Bank of Japan should not fear cutting interest rates even further.” Japan’s central bank “should not be constrained by fear that others will follow it into negative territory.”
Tags: BOJ, Central bank, Constraints, Fear, Interest rates, Negative
Bloomberg (February 1)
“The Bank of Japan governor’s major additions to stimulus in 2013 and the following year were unequivocally good for equities…. The latest salvo to spur inflation- negative interest rates on some deposits- is less straightforward.” Kuroda’s surprise move to negative rates has earned everything from praise to criticism, with some taking a wait-and-see approach.
Tags: BOJ, Deposits, Equities, Inflation, Interest rates, Kuroda, Stimulus, Straightforward
Reuters (January 29)
“The Bank of Japan unexpectedly cut a benchmark interest rate below zero on Friday, stunning investors with a move aimed at shielding the country’s sluggish economy from volatile markets and slowing global growth.”
Tags: Benchmark, BOJ, Economy, Growth, Interest rates, Investors, Unexpected, Volatility
Wall Street Journal (December 16)
“Financial markets took the Federal Reserve’s interest-rate ‘liftoff’ from near-zero in stride on Wednesday, broadly celebrating the 25 basis point increase in the federal-funds rate.” Given the late timing of the rise, however, this is very much unchartered territory. “The truth is that few people in financial markets are confident that anyone knows how this gradual return to monetary normalcy will turn out.”
Tags: Basis points, Fed, Federal-funds rate, Financial markets, Increase, Interest rates, Monetary, Near-zero, Normalcy
The Economist (December 12)
“Since interest rates hit rock-bottom in 2009, the Federal Reserve has repeatedly made optimistic forecasts about when they would start rising, only to delay the big day again and again.” The long-awaited hike now appears imminent. “On December 16th, when the Fed’s rate-setting committee meets, it seems all but certain to raise rates.”
Tags: Fed, Forecasts, Hike, Interest rates
Wall Street Journal (August 28)
“The turmoil in world markets may push back the date the Federal Reserve raises interest rates…. One consequence even in anticipation of the Fed’s move is that investors in emerging markets risk getting caught in a rip tide of liquidity heading back to the U.S.”
Tags: Emerging markets, Federal Reserve, Interest rates, Investors, Liquidity, Markets, Turmoil, U.S.
Institutional Investor (August 4)
“Conventional wisdom isn’t always the wisest.” Conventional wisdom holds that rising interest rates are bad for REITs. This time around, however, REITs “offer value in the face of an interest rate hike. Real estate investment trusts and master limited partnerships are yield plays that should fare well if rates rise gradually.”
Tags: Conventional wisdom, Gradual, Interest rates, MLPs, Real estate, REITs
Wall Street Journal (March 5)
The European Central Bank (ECB) hasn’t even actually started its quantitative easing (QE) activities. Somehow, however, its QE program “is working before it has even begun.” The euro has fallen 20% since last summer and, this week, dropped to $1.10, an eleven year low. How? “As investors came to view QE as inevitable, prices responded, especially the price of the euro. As a result of Mr. Draghi’s open-mouth operations to talk down the euro—coupled with an expectation that interest rates might rise soon in the U.S.—the euro has declined steadily against the dollar and other currencies.” Whether the actual QE program will be able to duplicate this pregame success remains to be seen.
Tags: Currencies, Dollar, Draghi, ECB, euro, Interest rates, Investors, Quantitative easing, U.S.
Institutional Investor (January 29)
“There will be no interest rate increase from the FOMC before December 2015.” Even though the Federal Reserve has indicated a mid-year increase, Institutional Investor believes this will be delayed. Members of the Federal Open Markets Committee “are acutely aware of the asymmetry of risk around the timing of rate hikes. That is, the cost of raising rates too soon—and stifling a domestic-focused, consumer-driven economic recovery—is viewed as considerably higher than the cost of raising rates too late.”
Tags: Asymmetry, Economic recovery, Federal Reserve, FOMC, Increase, Interest rates, Risk, Timing
Bloomberg (December 18)
Early this year, Kremlin aids advised Vladimir Putin that “Russia was rich enough to withstand the financial repercussions from a possible incursion into Ukraine.” Their advice and the subsequent invasion “now looks like a grave miscalculation. Russia has driven interest rates to punishing levels and spent at least $87 billion, or 17 percent, of its foreign-exchange reserves trying to prevent a collapse in the ruble from spiraling into a panic.
Tags: Advice, Collapse, Foreign-exchange reserves, Interest rates, Kremlin, Miscalculation, Panic, Putin, Ruble, Russia, Ukraine