Reuters (May 22)
“Asia buys about 80% of oil shipped through the shuttered Strait of Hormuz and stress in foreign exchange markets is one of the clearest signs that rising fuel prices are starting to hurt growth.” Asian governments have been left in “an unenviable position. The path to preserving growth is precarious because falling currencies can shake confidence and stoke inflation, but supporting them with higher rates means a hit for consumers and the economy’s growth engine on top of the fuel shock.”
Tags: Asia, Confidence, Consumers, Currencies, Forex, Governments, Growth, Inflation, Markets, Oil, Precarious, Prices, Rates, Shuttered, Strait of Hormuz, Unenviable
USA Today (August 16)
“President Donald Trump’s aggressive economic policies will likely significantly slow U.S. growth and push up inflation but stop short of causing a recession or “stagflation” – the dire scenarios that forecasters envisioned before he took office.” Economist Justin Begley of Moody’s Analytics believes the U.S. is edging toward stagflation, but will not end up there. Much will depend on the Fed which “faces a dilemma because lowering rates to bolster a softening labor market could further drive up inflation.”
Tags: Begley, Dilemma, Economic policies, Economist, Fed, Growth, Inflation, Labor market, Moody’s Analytics, Rates, Recession, Stagflation, Stagflation. Dire, Trump, U.S.
Bloomberg (May 19)
“‘Sell America’ is back as Moody’s pushes 30-year yield to 5%.” Just a week after traders “had to react quickly to weekend news of an improvement in trade relations between the US and China,” they will again have to paddle hard, but this time in the opposite direction. Rising Treasury yields are also expected to “complicate the government’s ability to cut back by running up its interest payments, while also threatening to weaken the economy by forcing up rates on loans such as mortgages and credit cards.”
Tags: 5%, China, Economy, Government, Interest payments, Loans, Moody, Mortgages, Rates, Sell America, Threatening, Traders, Treasury yields, U.S., Weaken
FX Empire (October 26)
The IMF’s latest forecast counteracted any hope attached to China’s stimulus policy. “Markets reacted positively” when the People’s Bank of China “cut 1-year and 5-year loan prime rates (LPR) by 25 basis points” since “lower borrowing costs could drive credit demand and consumption.” In contrast, “the IMF’s latest growth projections… called for caution,” with 2024 growth forecast for China lowered from 5.0% to 4.8%.” Moreover, the IMF pointed out that “Beijing’s maneuvers may not be enough to support an economic recovery.”
Tags: 25 bp, Borrowing costs, Caution, China, Consumption, Credit demand, Economic recovery, Forecast, Growth projections, IMF, Markets, PBOC, Rates, Reacted, Stimulus
Financial Times (August 7)
The equity sell-off in the U.S. “could have triggered the unwinding of the carry trade, not the other way around. And the timing suggests this is what happened. The equity sell-off did not start in earnest until Friday of last week — two days after the BoJ raised rates, or after currency traders had time to digest the news.”
Tags: BOJ, Carry trade, Currency traders, Equity, Rates, Sell-off, Triggered, U.S., Unwinding
New York Times (April 12)
“More economists are paring their bets that the Fed will cut rates after the latest Consumer Price Index report.” The new consensus of “higher-for-longer inflation… has hit the U.S. housing market like a thunderbolt. Home prices and mortgage rates are climbing again, dashing hopes that financing costs would fall this year and adding another economic question that could hang over the presidential election campaign.”
Tags: CPI, Economists, Fed, Financing costs, Home prices, Housing market, Inflation, Mortgage rates, Rates, U.S.
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
Reuters (February 15)
“Japan’s journey back to normality has just taken an unwelcome turn. The world’s third-largest economy in U.S. dollar terms ceded the title to Germany on Thursday” as Japan simultaneously slipped into a recession. “More unnerving is a slew of weak data making it harder for the Bank of Japan to justify hiking rates and officially ending its era of ultra-easy monetary policy.”
Tags: BOJ, Economy, Germany, Japan, Monetary policy, Normality, Rates, Recession, Third-largest, U.S., Unnerving, Uultra-easy, Weak data
USA Today (January 2)
“The post-COVID-19 economy was finally supposed to stop defying gravity and topple into a recession this year.” While “growth is expected to slow… other factors are likely to keep the economy afloat, forecasters say, including near-record home and stock prices, a further easing of inflation to or near the Fed’s 2% goal and the central bank’s tentative plans to cut interest rates more sharply than previously anticipated.”
Tags: Easing, Economy, Fed, Growth, Inflation, Interest, Post-Covid, Rates, Recession, Record, Slow, Stock prices
Washington Post (December 2)
“The debate now is when the Fed will start cutting interest rates. Stocks ,, come by May. That would certainly help the housing market, which has frozen with mortgage rates at the highest levels in about two decades.”
Tags: Betting, Cutting, Debate, Fed, Frozen, Highest, Housing market, Interest, Investors, Mortgage rates, Rallying, Rates, Stocks
