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Inc. (January 9)

2025/ 01/ 11 by jd in Global News

“Everyone loves talking about the stock market, but the $28 trillion Treasury market is the fortuneteller of the pair—bonds are now flashing warnings of a Fed policy error, resurgent price pressures, and a ballooning debt pile.” Contrary to expectations, “bond yields have surged since the Fed began cutting interest rates.”

 

Forbes (January 3)

2025/ 01/ 04 by jd in Global News

“By the end of 2024, it was clear average national wages weren’t keeping pace with the rate of inflation…. The BOJ decided on December 19 that Japan isn’t ready to normalize interest rates,” with the official rate remaining 0.25%. This presents “quite a paradox for global investors who’d rushed into Nikkei 225 Stock Average stocks. If the BOJ thinks Japan still requires economic training wheels after all this time, why should they bet on Japan Inc.?”

 

U.S. News and World Report (December 30)

2024/ 12/ 30 by jd in Global News

“The past two years have defied economists’ predictions for a slowing economy, or even a recession.” Despite increased risk and uncertainty arising from the “wild card of Trump,” the U.S. economy “should remain strong” as it is buoyed by “a moderating labor market, lower interest rates and strong household income.” Household wealth has surged 40% to $150 trillion since 2020, “while debt service payments measured as a percentage of income have largely remained static.”

 

New York Times (November 27)

2024/ 11/ 29 by jd in Global News

“The inflation risk stalking the markets eased over the summer,” but is now “front and center again as investors contend with a Trumponomics crackdown on immigration, a rising trade-war risk and a potential bonanza of tax cuts.” Trump’s “latest trade threats show how uncertain the outlook could be”. Since he vowed “to impose tariffs on Canada, China and Mexico…analysts have been gaming out the potential impact.” It could be an opening gambit of little consequence, but “economists fear that it could add bottlenecks and costs to supply chains and reignite inflation, and that it could scramble the Fed’s policy on interest rates.”

 

Financial Times (October 10)

2024/ 10/ 12 by jd in Global News

“Germany is facing its first two-year recession since the early 2000s as the government downgraded its 2024 growth forecast for the eurozone’s largest economy.” Hurdles have included “soaring inflation, high interest rates and energy costs driven higher by Russia’s full-scale invasion of Ukraine,” along with longer term “structural problems, such as Germany’s dire skills shortage, years of under-investment in infrastructure and excessive red tape.”

 

Bloomberg (October 7)

2024/ 10/ 09 by jd in Global News

“The ‘no landing’ scenario–a situation where the US economy keeps growing, inflation reignites and the Federal Reserve has little room to cut interest rates–had largely disappeared as a bond-market talking point in recent months.” After “setting up for slowing growth,” traders are undergoing another “wrenching recalibration” on the heels of a “blowout” jobs report “showing the fastest job growth in six months, a surprising drop in US unemployment and higher wages.” Treasury yields surged and investors are “furiously reversing course on bets for a larger-than-normal half-point interest-rate reduction.”

 

The Economist (September 18)

2024/ 09/ 18 by jd in Global News

“The Federal Reserve’s decision to lower interest rates by half a percentage point, announced on September 18th, is momentous for two reasons. As the first cut by America’s central bank since it lifted rates to quell inflation, it marks the start of a monetary-easing cycle. It also represents a bet by the Fed that inflation will soon be yesterday’s problem and that action is needed to support the labour market.”

 

Financial Times (September 10)

2024/ 09/ 12 by jd in Global News

“Central bankers on both shores of the Atlantic are under pressure from many sides — political circles, financial markets, public opinion — to cut interest rates.” But the European Central Bank (ECB) faces distinctly different circumstances than the Fed or BoE. The ECB has already cut rates to 3.75 per cent, which “is already a solid 1.5 percentage points below” the Fed’s rate and inflation is less controlled. “The ECB has no room to cut rates.” It should “maintain a moderately restrictive stance on monetary policy to make further progress on inflation.”

 

Reuters (September 5)

2024/ 09/ 06 by jd in Global News

“Global property markets, rattled by the steepest rise in interest rates in a generation, will get little relief from the gradual easing of borrowing costs, with scant hope of a return to the free money that fuelled a boom.”

 

Financial Times (August 23)

2024/ 08/ 24 by jd in Global News

“Closely watched gauges of long-term inflation expectations in Europe have reached their lowest levels for almost two years, in a sign that investors think central banks can keep lowering interest rates without risking a flare-up in price pressures.” Concerns are also easing in the U.S., with “markets pricing the average long-term inflation rate at 2.4 per cent, down from 2.6 per cent in July.”

 

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