Barron’s (August 14)
“Investors have typically penalized emerging markets such as Turkey, Argentina, and China due to concerns about the independence of the central bank, government intervention in the private sector, and rampant overspending.” Now these concerns are focused on “the U.S., which has historically been the paragon of a developed market.” Investors are reevaluating “the premium that U.S. assets have long commanded” and this could lead to “weaker long-run returns for stocks or, more immediately, higher bond yields and a continuation in the weakness of the dollar that has emerged this year.”
Tags: Argentina, Bond yields, Central bank, China, Developed market, Emerging markets, Government intervention, Independence, Investors, Overspending, Paragon, Penalized, Premium, Private-sector, Rampant, Reevaluating, Returns, Stocks, Turkey, U.S. assets
Financial Times (September 27)
China’s biggest stimulus package since the pandemic has “supercharged markets, putting Chinese stocks on track for their best week since 2008.” The massive package boasts “billions of dollars from the central bank to support the stock market, policy rate cuts, measures to boost bank liquidity and efforts to stabilise China’s prolonged property crisis, including a 50-basis point interest rate cut for mortgage holders.” Nevertheless, it may not be enough “to reignite consumer confidence in the world’s second-largest economy.”
Tags: 2008, Central bank, China, Markets, Mortgage, Pandemic, Property crisis, Rate cuts, Stimulus, Stock market, Stocks, Supercharged
Forbes (July 29)
“As central bank decisions go, the one Bank of Japan Governor Kazuo Ueda will make this week may be the toughest in modern history.” He is faced with deciding “whether to break with 25 years of zero interest rates and 23 years of quantitative easing by putting a notable rate hike on the scoreboard…. Making matters worse, smart economists can make nuanced abstractions compelling arguments for taking any of the three doors sitting before him.”
Tags: 25 years, BOJ, Central bank, Decisions, Economists, Quantitative easing, Rate hike, Toughest, Ueda, Zero interest
Seeking Alpha (May 8)
“Sweden is following Switzerland, Hungary, and the Czech Republic in easing monetary policy for the first time since hiking cycles began in 2022, when inflation surfaced in the aftermath of the COVID pandemic.” The quarter point cut of the overnight rate by the Riksbank makes “it more likely that the ECB will also jump on the bandwagon. The shift is noteworthy to global investors as it highlights the current central bank divergence taking place across the world.”
Tags: Aftermath, Central bank, Covid, Czech Republic, Easing, ECB, Global investors, Hungary, Inflation, Monetary policy, Pandemic, Riksbank, Sweden, Switzerland
Bloomberg (March 28)
“The risks are piling up for Japan’s currency, stocks and bonds as the nation’s fiscal year draws to an end right when many global markets close for Easter — and less than two weeks after the central bank hiked interest rates.”
Tags: Bonds, Central bank, Currency, Easter, Fiscal year, Global markets, Interest rates, Japan, Piling up, Risks, Stocks
New York Times (March 23)
“Investors in the futures market had expected the Fed to cut rates up to six times this year, but have recently come around to the central bank’s view that only three cuts are more likely. It hasn’t seemed to matter for the stock market’s barnstorming rally.”
Tags: Central bank, Fed, Futures, Investors, Rally, Rates, Stock market, Three cuts
Seeking Alpha (December 11)
“As markets gear up for major central bank meetings this week, starting with the Federal Reserve on Dec.12-13, all eyes will closely watch for any change in the policymakers’ tone to predict when rate cuts will begin and by how much.” The consensus is that the Fed keep “federal funds target range steady,” with “rate cuts starting in May.”
Tags: Central bank, Consensus, Federal Reserve, Markets, Meetings, Policymakers, Predict, Rate cuts, Steady
Bloomberg (October 31)
“Japan’s central bank insists it still wants to cap long-term market rates,” but their “actions suggest officials are losing the stomach for it.” Kazuo Ueda is dismantling “the cumbersome legacy of his predecessor… more rapidly” than expected “when he took the helm of the Bank of Japan.” Nevertheless, BOJ officials are insisting that the “policy is only being tweaked.” This threatens “the credibility of its communications” as “key parts of the BOJ’s entire approach to setting borrowing costs are being removed or watered down.”
Tags: BOJ, Cap, Central bank, Credibility, Cumbersome, Japan, Legacy, Long term, Market rates, Officials, Predecessor, Threatens, Ueda
Reuters (March 17)
“Investors held tight to bets that banking jitters would rein in the ECB’s ability to jack up borrowing costs again in the months ahead, as the central bank delivered a large rate hike on Thursday but wouldn’t signal future moves given an uncertain outlook.”
Tags: Banking, Bets, Borrowing costs, Central bank, ECB, Investors, Jitters, Rate hike, Signal, Uncertain outlook
Financial Times (August 22)
“China has slashed its mortgage lending rate for the second time this year as the country’s central bank seeks to limit the fallout from a liquidity crisis in the property sector.” While this may “reduce borrowing costs on new mortgages nationwide and provide a boost to the country’s debt-laden real estate sector,” it is unlikely to fix the “crisis of confidence faced by Chinese developers.”
Tags: Borrowing costs, Central bank, China, Crisis of confidence, Debt-laden, Fallout, Lending rate, Liquidity crisis, Mortgage, Property sector, Real estate, Slashed
