The Guardian (November 26)
“The world’s major central banks are scratching their heads over how to deal with the rising cost of living. Raising interest rates now could deal a blow to the post-pandemic recovery. Wait too long, and inflation may spiral out of control.”
Tags: Central banks, Cost of living, Inflation, Interest rates, Post-pandemic, Recovery, Rising, Spiral, Wait
New York Times (September 9)
“The crypto revolution is bringing financial services to the unbanked, but not without risks.” The crypto “market is expanding quickly — in all sorts of directions,” giving rise to new “Shadow Banks.” Crypto customers “can earn much higher interest rates than at traditional banks, and they can borrow money, using crypto as collateral, often with no credit checks,” but the potential dangers include hacks, fraud, and the lack of FDIC protection for deposits.
Tags: Borrow, Collateral, Credit checks, Crypto, Financial services, Fraud, Hacks, Interest rates, Revolution, Risks, Shadow banks, Unbanked
Financial Times (February 13)
“Investors poured a record $58bn into stock funds this week while slashing their cash holdings, in the latest sign of the fervor sweeping global financial markets…. Historically low interest rates and expectations for a big rebound this year in global economic growth have whet investors’ appetite for riskier assets,” but this is creating unease among some that “asset prices have become overextended.”
Tags: Assets, Cash holdings, Economic growth, Expectations, Fervor, Financial markets, Interest rates, Investors, Rebound, Riskier, Stock funds
Reuters (June 26)
“World stocks have been on a rollercoaster ride in the first half of 2020. Having slumped 35% from Feb. 20 to March 23, they are now within 10% of February’s record highs thanks to lashings of fiscal stimulus, interest rates slashed to 0% or below in most major economies, and massive amounts of QE. Borrowing costs for high-grade U.S. companies have in fact fallen below January levels.” The rest of the year could bring more roller coaster. “Much depends on whether another coronavirus wave comes crashing down,”
Tags: Borrowing costs, Fiscal stimulus, High-grade, Interest rates, QE, Rollercoaster, Slashed, Slumped, Stocks, U.S.
Wall Street Journal (March 4)
“The Federal Reserve has become the default doctor for whatever ails the U.S. economy, and on Tuesday the financial physician applied what it hopes will be monetary balm for the economic damage from the coronavirus.” Alas “financial markets were underwhelmed.” This “may speak to the limited effect that lower interest rates can have on the supply shock of a pandemic.”
Tags: Coronavirus, Damage, Economy, Fed, Interest rates, Markets, Monetary balm, Supply shock, U.S., Underwhelmed
Bloomberg (February 19)
“For all the stimulus measures that officials are rolling out to combat the economic impact of the coronavirus, lower interest rates and bigger budgets are unlikely to make people feel immune. And it’s consumer behavior that will influence the magnitude of any hit.”
Tags: Budgets, Combat, Consumer behavior, Coronavirus, Economic impact, Immune, Interest rates, Officials, Stimulus
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.
