Wall Street Journal (December 12)
“Investors spent most of 2023 fretting about inflation and interest rates. Now they are snapping up everything from stocks and bonds to crypto and even gold.” Does the “simultaneous surge across assets” signal “the arrival of a lasting bull market” or is it “just a fleeting sugar high at the end of the Federal Reserve’s tightening cycle?” Opinions are divided.
Tags: 2023, Bonds, Bull market, Crypto, Cycle, Fed, Fleeting, Fretting, Gold, Inflation, Interest rates, Investors, Stocks, Surge, Tightening
Wall Street Journal (November 13)
“Foreclosures are surging in an opaque and risky corner of commercial real-estate finance, offering one of the starkest signs yet that turmoil in the property market is worsening.” Through just October, the Journal found notices for “mezzanine loans and other high-risk loans” had already more than doubled the number for all of 2022 and likely reached “the highest total ever for a single year, as higher interest rates and rising vacancies punish the property sector.”
Tags: Commercial, Finance, Foreclosures, Highest, Interest rates, Mezzanine loans, Property market, Real estate, Risky, Surging, Turmoil, Worsening
Wall Street Journal (October 31)
“Monetary policy officials are hinting to financial markets that the Federal Reserve will stop raising interest rates—even as the Fed signals that it is too early to declare victory over inflation. Wary investors can only speculate, while market analysts are happy to guess the Fed’s next move.”
Tags: Analysts, Federal Reserve, Financial markets, Hinting, Inflation, Interest rates, Investors, Monetary policy, Officials, Signals, Speculate, Victory, Wary
Reuters (October 2)
“Tensions between the West and China are rising, from tit-for-tat trade tariffs to tech rivalry and spying allegations. The ramifications for global markets are significant, with Washington and Beijing’s determination to loosen dependence on each other fraying long-established supply chains. That could help keep inflation and interest rates elevated. Still, there are gains for emerging nations and tech giants on the right side of the power battle.”
Tags: China, Dependence, Emerging nations, Fraying, Global markets, Inflation, Interest rates, Ramifications, Rising, Spying, Supply chains, Tech rivalry, Tensions, Tit-for-tat, Trade tariffs, West
Bloomberg (September 21)
“The value of the yen has slumped to the lowest on record, as measured against a broad basket of its peers and adjusted for inflation,” the Bank for International Settlements found based on data from 1970 onward. This serves to “underscore the pressure on the Bank of Japan to normalize its ultra-easy monetary regime, which continues to weigh down the nation’s interest rates and weaken the currency. The drop in the so-called real effective exchange rate means Japanese have to pay more for imported goods and services at a time when wage growth is failing to compensate for inflation.”
Tags: BIS, BOJ, Currency, Imports, Inflation adjusted, Interest rates, Japan, Normalize, Pressure, Real effective exchange rate, Record, Slumped, Ultra-easy, Wage growth, Yen
Reuters (August 17)
“Headline inflation in the euro zone has halved in the past nine months and was 5.3% in July. But that’s not good enough for ECB hardliners. They want to see the core number, which excludes energy, food, alcohol and tobacco, come down sharply before putting an end to the unprecedented climb in the bloc’s interest rates. That measure is falling more slowly and was running at 5.5% in July.” The ECB obsession over core inflation increases the “risk of policy mistake.”
Tags: 5.3%, Alcohol, Core, ECB hardliners, Energy, Euro zone, Food, Headline, Inflation, Interest rates, July, Obsession, Policy mistake, Risk, Tobacco
Wall Street Journal (August 8)
“July’s gains left hedge funds closing out so-called short positions and cutting risk at the fastest pace in years.” As they race to cover their shorts, they are “providing yet another tailwind for stocks, which have rallied this summer on optimism that a strong economy can withstand higher interest rates.” The rally caught many “short sellers off guard,” and as they “buy the shares back at a high price to limit further losses,” additional demand can drive “prices go even higher.”
Tags: Cutting risk, Gains, Hedge funds, Interest rates, July, Losses, Optimism, Rally, Shares, Short positions, Stocks, Tailwind
Investment Week (August 4)
“The outlook for the UK equity market feels particularly depressed and it is not hard to see why. Even after June’s better-than-expected inflation figures, core UK inflation remains high, which suggests higher interest rates for longer. Commentators are expecting that the base rate, which at 5.25% is at its highest for over 15 years, is likely to peak around 5.75%. This would bring even more pain for mortgage borrowers and greater government borrowing costs to an already faltering economy.”
Tags: 5.25%, 5.75%, Base rate, Borrowers, Depressed, Equity market, Inflation, Interest rates, Mortgage, Outlook, Pain, Peak, UK
Wall Street Journal (June 20)
“The world’s central banks underestimated inflation last year. They are trying not to make the same mistake twice.” But they are “in a tricky spot. They need to decide if inflation has stalled way above their 2% target, which could require much higher interest rates to fix, or if inflation’s decline is only delayed. Get the call wrong, and they could push the rich world into a deep recession or force it to endure years of high inflation.”
Tags: 2% target, Central banks, Deep recession, Delayed, Inflation, Interest rates, Mistake, Rich world, Stalled, Tricky spot, Underestimated
BBC (June 13)
“UK wages have risen at their fastest rate in 20 years, excluding the pandemic, raising expectations that UK interest rates will have to rise. Regular pay excluding bonuses increased by 7.2% in the three months to April, although it still lags behind inflation.” The Bank of England has raised “interest rates 12 times since 2021 to try to slow price rises” and warned that surging pay is contributing to inflation.
Tags: 7.2%, BOE, Bonuses, Expectations, Inflation, Interest rates, Pandemic, Pay, Price, Surging pay, UK, Wages
