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Reuters (June 26)

2020/ 06/ 27 by jd in Global News

“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,”

 

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.”

 

Bloomberg (February 19)

2020/ 02/ 21 by jd in Global News

“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.”

 

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.”

 

Forbes (October 28)

2019/ 10/ 30 by jd in Global News

“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.”

 

Investment & Pensions Europe (October Issue)

2019/ 10/ 12 by jd in Global News

“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.”

 

Barron’s (September 12)

2019/ 09/ 14 by jd in Global News

“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.”

 

Bloomberg (June 10)

2019/ 06/ 12 by jd in Global News

“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.

 

Reuters (May 16)

2019/ 05/ 16 by jd in Global News

“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.”

 

The Economist (April 13)

2019/ 04/ 15 by jd in Global News

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.”

 

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