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Wall Street Journal (March 4)

2020/ 03/ 06 by jd in Global News

“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.”

 

Financial Times (February 7)

2020/ 02/ 09 by jd in Global News

“Risk assets started this year on a tear. Before the coronavirus outbreak unsettled investors, global equity prices had risen by more than 10 per cent in three months while credit spreads were near record lows.” Attributing this to “to the Fed’s actions is alluring,” but probably incorrect and “it could leave investors wrongfooted again when the central bank pares back its interventions later in this year.”

 

Investment Week (November 18)

2019/ 11/ 21 by jd in Global News

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.”

 

USA Today (October 4)

2019/ 10/ 05 by jd in Global News

“The unemployment rate fell from 3.7% to 3.5%, the lowest since December 1969….  Average wages, however, fell. Wall Street cheered the mixed report, which … kept in play a possible Fed rate cut this month, which would be the third since July.”

 

Financial Times (September 20)

2019/ 09/ 22 by jd in Global News

“Shock and confusion” resulted when overnight repo rates soared to 10%. The Fed was able to calm markets, but the situation is a reminder. “The more that QE (and its partial reversal) reshapes global finance, the greater the risk that the cogs in the machine unexpectedly misfire. That is no reason to panic. But central bank pilots—like investors—are learning on the job. Better hope they stay completely alert.

 

LA Times (August 23)

2019/ 08/ 25 by jd in Global News

“The real threat to the U.S. economy Friday wasn’t Powell,” the Federal Reserve Chairman. “It was Trump’s trade policies and public outbursts. Having righted itself by the end of Powell’s speech, the Dow dropped sharply immediately after the president’s Friday tirade. As of this writing, it was down 455 points.”

 

Washington Post (August 2)

2019/ 08/ 04 by jd in Global News

“China’s state-driven economic model has created many problems. Monetary policy isn’t one of them.” On the heels of the Fed’s rate cut, the ECB “looks poised to follow suit in September” and “the temptation is high for other central banks to fall in line.” But often they’re “canceling out each other’s efforts,” which is one reason the dollar didn’t fall with the latest rate cut. “Developed nations play out what is a zero-sum game.” In the process, they’re “using up the ammunition they have available to support their economies in the event of a downturn.” In contrast, the PBOC has avoided playing the rate cut game and “China’s 10-year government bond yield is relatively unchanged since the end of 2018.”

 

Bloomberg (May 7)

2019/ 05/ 08 by jd in Global News

“The conventional wisdom that the Fed’s next move would be down and the trade spat with China would end just got dealt a one-two punch…. Federal Reserve Chair Jerome Powell pushed back against calls for a near-term rate cut and U.S. President Donald Trump threatened to ratchet up tariffs on imported Chinese goods.”

 

Reuters (March 25)

2019/ 03/ 26 by jd in Global News

“Downbeat data from the US and Europe, combined with a cautious tone from the Federal Reserve, frightened investors last week. The first inversion in the US bond yield curve since 2007 also heightened concerns, by raising fears of a recession in the world’s largest economy.”

 

Wall Street Journal (August 23)

2018/ 08/ 25 by jd in Global News

“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.”

 

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