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Category: US Interest Rates

The analysis published under this category are as follows.

Interest-Rates

Thursday, April 10, 2014

Interest Rate Hikes on the Horizon? Not Likely / Interest-Rates / US Interest Rates

By: Matt_Machaj

Recent weeks were not bad for those gold investors’ hearts filled with golden hopes. The price of gold depends on many factors, but past patterns can give us important hints and suggest which of them are to be carefully studied and properly comprehended. If history were to teach us anything about gold’s past market values it would most primarily be the following: watch out for the feds! Wise observation of government policies is the main driving force for what is happening in the gold market (surely along with supply factors in the longer run). As we discussed a month ago, this is the main reason for the observed correlation between the gold price and the interest rates. Not because interest rates per se are always casually linked to the gold price. But because interest rates are a reflection of current government policies.

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Interest-Rates

Thursday, March 20, 2014

Fed Changes the Rules to Maintain ZIRP / Interest-Rates / US Interest Rates

By: Michael_Pento

The New Chairperson of the Federal Reserve showed off her dovish feathers after the latest meeting of the FOMC. Ms. Yellen abrogated the threshold of 6.5% on the unemployment rate as the starting point for short term rate hikes and replaced it with amorphous and ambiguous language that allows plenty of wiggle room with rates.

Just like a child sometimes changes the rules of a game in mid-stream in order to guarantee a favorable outcome, the Fed has ripped up the rulebook to suit its own needs.

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Interest-Rates

Wednesday, February 05, 2014

Challenging the Consensus for Rising Interest Rates / Interest-Rates / US Interest Rates

By: John_Mauldin

One of the most universal consensus calls in the markets today is that interest rates are destined to rise. Thirteen out of 13 major investment banks all think that interest rates for global fixed-income will rise this year. I get nervous when everybody is on the same side of the boat. And so does my good friend and business partner Niels Jensen of Absolute Return Partners in London. This week’s Outside the Box is another of his thoughtful essays, giving us five reasons why interest rates may in fact go down this year. That is not to say that we don't both agree that rates have to go back up eventually, but to us the timing is not so obvious as it is to the major investment banks. Rather than tip his thunder, I’ll let Niels advocate for his position. (And you can see more of his consistently excellent work at www.arpinvestments.com.)

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Interest-Rates

Friday, January 31, 2014

FOMC on Future U.S. Interest Rates / Interest-Rates / US Interest Rates

By: Matt_Machaj

In terms of asset purchases monetary policy was, is and will be accommodative. More importantly so is the case with interest rates, which are still flirting with zero percent range - despite the fact that that lowering was believed by some to be temporary. I remember that even in 2009 there were people seriously arguing that we should expect interest rate hikes in few months. The history has proven them to be astonishingly wrong.

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Interest-Rates

Sunday, January 26, 2014

TNX Chart: Specter of Rising U.S. Interest Rates / Interest-Rates / US Interest Rates

By: Jim_Willie_CB

We are at the doorstep of a major USTreasury Bond breakdown. The TNX (10-year bond yield) is at the 3.0% doorstep, as 3.5% looms very likely in the coming months. A horrible threat of a 3.7% target is presented in the chart. A rising trend is seen in many characteristics that cannot be easily dimissed. The following graphic is an extremely powerful chart, thus the center piece of the article. If and when the breakout comes, it will make the Taper Talk backfire seem rather insignificant, as a gathering storm will hit like a financial hurricane on every continent. The Jackass is on record with a forecast of 3.5%, which remains in place. One must be patient to watch it unfold, since it can take months to unfold and to manifest itself. That is far more time than the nitwits who are quick to label it a wrong forecast call. But then again they are are loud unimpressive dullards who litter the audience, taking up valuable space.

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Interest-Rates

Thursday, January 23, 2014

Could A Compound Debt Interest Rate Payments Wildfire Threaten US Solvency? / Interest-Rates / US Interest Rates

By: Dan_Amerman

For the first time since the end of World War II, the total US federal debt now equals 100% of the size the US economy. But while that is obviously a situation of great concern, it may not be the worst of the danger.

Instead, the greatest debt-related threat to the solvency of the United States government and the value of the dollar could be the fact that the US isn't actually making any net principal or interest payments on its debt. 

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Interest-Rates

Saturday, December 28, 2013

U.S. Treasury Bond Yields Creeping Higher / Interest-Rates / US Interest Rates

By: PhilStockWorld

Courtesy of Doug Short: What’s New: The 10-year note closed the week at 3.02%, up 17 bps since the close before the latest FOMC minutes were released and the highest since July 25, 2011. The interim closing low was 1.43%, exactly one year later on July 25, 2012.

The latest Freddie Mac Weekly Primary Mortgage Market Survey, released yesterday, puts the 30-year fixed at 4.48%, 117 bps above its all-time low of 3.31% in late November of last year and 10 bps below its interim high reported on August 22nd.

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Interest-Rates

Monday, December 23, 2013

Small Pullback in Money Printing = Big Spike in Interest Rates? / Interest-Rates / US Interest Rates

By: Profit_Confidential

Michael Lombardi writes: Quietly, without much fanfare or news, the bellwether 10-year U.S. Treasury hit a yield of 2.9% this past Friday—double what it yielded in June of 2012. (Source: Treasury.gov, last accessed December 20, 2013.)
Yes, the Federal Reserve only slightly pulled back on its money printing program and interest rates are already spiking.

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Interest-Rates

Wednesday, December 04, 2013

When Saving Interest Rates Go Negative / Interest-Rates / US Interest Rates

By: BATR

What is more frightening, then the loss of your money. Since most people have, some meager amount held in some form of a financial institution, the prospect of the banksters' cabal placing a charge against your account for the mere privilege of maintaining a deposit, is horrible. The Business Insider warns, In The Future, You May Have To Pay The Bank To Hold Your Money, and raises a very dreadful prospect.

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Interest-Rates

Sunday, November 17, 2013

Code Red - The Unintended Consequences of ZIRP, Zero Interest Rates Policy / Interest-Rates / US Interest Rates

By: John_Mauldin

Yellen's coronation was this week. Art Cashin mused that it was a wonder some senator did not bring her a corsage: it was that type of confirmation hearing. There were a few interesting questions and answers, but by and large we heard what we already knew. And what we know is that monetary policy is going to be aggressively biased to the easy side for years, or at least that is the current plan. Far more revealing than the testimony we heard on Thursday were the two very important papers that were released last week by the two most senior and respected Federal Reserve staff economists. As Jan Hatzius at Goldman Sachs reasoned, it is not credible to believe that these papers and the thinking that went into them were not broadly approved by both Ben Bernanke and Janet Yellen.

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Interest-Rates

Friday, November 08, 2013

Janet Yellen's Mission Impossible / Interest-Rates / US Interest Rates

By: Peter_Schiff

Most market watchers expect that Janet Yellen will grapple with two major tasks once she takes the helm at the Federal Reserve in 2014: deciding on the appropriate timing and intensity of the Fed's quantitative easing taper strategy, and unwinding the Fed's enormous $4 trillion balance sheet (without creating huge losses in the value of its portfolio). In reality both assignments are far more difficult than just about anyone understands or admits.

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Interest-Rates

Monday, November 04, 2013

What the Fed Doesn't Want You to See / Interest-Rates / US Interest Rates

By: Money_Morning

David Zeiler writes: Ever heard of the Taylor Rule?

Not many people have, but the folks at the U.S. Federal Reserve are very familiar with it - and they'd probably prefer that this highly respected guideline for the federal funds rate languish in obscurity.

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Interest-Rates

Wednesday, October 23, 2013

Interest Rates 60 Year Cycle Low / Interest-Rates / US Interest Rates

By: readtheticker

The cost if capital is rising, the big cycles are rolling over. Today's debt slaves will not be happy.

For the fundamental trader a good reason that interest rates are on the long trend higher can be found via Steven Roach comments on a change in China.

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Politics

Tuesday, October 22, 2013

Fed Flying Blind - Fixing the Economy as Easy as 1-2-3 / Politics / US Interest Rates

By: Axel_Merk

With the economy stuck in first gear, a couple of common sense steps that wouldn't cost taxpayers an arm and a leg could help the economy shift into a higher gear.

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Interest-Rates

Tuesday, October 22, 2013

Janet Yellen the U.S. Interest Rates Hawk? / Interest-Rates / US Interest Rates

By: Steve_H_Hanke

Well, it’s official. President Obama has picked Janet Yellen as his nominee to be the next Federal Reserve Chairman. In the months leading up to this announcement, the press unanimously dubbed Yellen the Queen of the Doves, pointing to her reluctance to roll back the Fed’s Quantitative Easing program. As it turns out, however, Yellen is hardly the dove she is made out to be. Indeed, when it comes to money supply, Dr. Yellen seems, well, downright hawkish.

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Stock-Markets

Wednesday, September 18, 2013

What Investors Can Do About Rising Interest Rates / Stock-Markets / US Interest Rates

By: InvestmentContrarian

Sasha Cekerevac writes: As my long-time readers are fully aware, one of the concerns I have brought up over this past year has been the reaction in the economy to what I believed would occur—higher interest rates.

As we are now seeing interest rates increase, the result of this action is beginning to seep through into the economy.

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Interest-Rates

Wednesday, September 11, 2013

Why the Fed Needs to Taper Now in Spite of Weak Jobs Report / Interest-Rates / US Interest Rates

By: InvestmentContrarian

George Leong writes: The Federal Reserve will need to make a big decision soon, prior to its Federal Open Market Committee (FOMC) meeting in mid-September, regarding the continuation of its monetary policy. Before Friday’s non-farm payrolls report, the decision was somewhat easy to make on the heels of positive economic data and a good second-quarter gross domestic product (GDP) reading. The initial claims for the most recent week were the lowest since before the recession.

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Interest-Rates

Wednesday, September 11, 2013

How This Week’s Fed Meeting Could Impact Your Portfolio / Interest-Rates / US Interest Rates

By: InvestmentContrarian

Sasha Cekerevac writes: All eyes are on this week’s important Federal Reserve meeting, in which many analysts expect that the Federal Reserve will decide to begin to lower its $85.0-billion-per-month asset purchase program.

But things might not be that easy, since the report on job creation released last Friday is showing signs of deceleration.

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Stock-Markets

Friday, August 30, 2013

How Rising Interest Rates Will Affect You / Stock-Markets / US Interest Rates

By: Investment_U

Marc Lichtenfeld writes: According to a survey, 63% of investors don’t know how rising interest rates will affect their portfolios.

They should, because rates are climbing fast. The 10-year Treasury is at nearly 3%. Just three months ago, it was under 2%. The 10-year Treasury yield can affect mortgage rates, interest rates on credit cards… and especially your portfolio.

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Interest-Rates

Saturday, August 24, 2013

U.S. Treasury Bonds Are Oversold / Interest-Rates / US Interest Rates

By: Sy_Harding

Has there ever been an asset class bombarded by such intense negativity in such a short period of time? Fed Chairman Bernanke’s warning in May that the Fed would soon begin to ‘taper’ its QE bond-buying stimulus program brought ‘The End of Bonds’ headlines out in force. And bond investors responded.

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Interest-Rates

Tuesday, August 20, 2013

QE Party is Ending, Rising Interest Rates Means the Fed Could Go Bankrupt / Interest-Rates / US Interest Rates

By: Graham_Summers

The QE party is ending. And the following hangover is going to be brutal.

Since 2007 the Central Bankers of the world have operated under the belief that they can hold the financial system together by engaging in round after round of Quantitative Easing (QE) without losing control of the bond markets/ interest rates.

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Interest-Rates

Tuesday, August 20, 2013

Rising Treasury Yields, Tight Money Has Already Started / Interest-Rates / US Interest Rates

By: Clif_Droke

Aside from the fact that the 10-Year Treasury Yield Index (TNX) is rising, one reason for the recent equity market sell-off is the uncertainty generated by the Fed's latest announcement concerning the future of QE3.

At its latest press conference, Fed Chairman Bernanke indicated the central bank could start winding down its $85 billion/month asset purchase program in September. This has understandably caused a certain amount of consternation on Wall Street, especially given the feeling among many traders that QE has been largely responsible for the stock market's rebound.

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Interest-Rates

Sunday, August 04, 2013

If You're Worried About Rising Interest Rates, Look at This Chart / Interest-Rates / US Interest Rates

By: DailyWealth

David Eifrig writes: "Don't fight the Fed."

You can hear that phrase on bond-trading desks throughout Wall Street. It's a warning to investors and traders. Don't try to outthink the central bank or anticipate its next moves...

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Interest-Rates

Wednesday, July 10, 2013

How High Will U.S. Interest Rates Go? / Interest-Rates / US Interest Rates

By: Michael_Pento

To best answer the question as to where U.S. Treasury yields are headed in the next quarter or two, it is important to know where they would be without the manipulation of our central bank, where they would be in a growing economy and, also, absent the threat from an imminent collapse of a major foreign currency. The current yield on the Ten-Year Note is 2.6%, up from 1.6% less than two months ago. True, that rate has surged of late but it is still far below its 40-year average of around 7%. But just prior to the beginning of the Great Recession (in fall of 2007) the yield on the Ten-Year Note was 4%--140 basis points higher than today.

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Interest-Rates

Sunday, July 07, 2013

Mortgage Backed Securities Clobbered and U.S. Treasury Yields Soar Following Job Numbers / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Curve Watchers Anonymous notes that treasury yields surged higher and mortgage backed securities (MBS) had a steep selloff following purportedly good job numbers.

Beneath the surface, the economy actually shed 326,000 full-time jobs.

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Interest-Rates

Monday, June 24, 2013

How Recent Surge in Yields Compares with the Past / Interest-Rates / US Interest Rates

By: PhilStockWorld

Courtesy of Doug Short : The bond market selloff after the FOMC meeting and Chairman Bernanke’s surprising specifics about exiting QE was quite stunning. However, his hawkish position was supported by today’s release by the Bank for International Settlements (BIS) of its annual report. The abstract for opening section, headed Making the most of borrowed time, begins with the following assertion:

Originally forged to describe central banks’ actions to prevent financial collapse, “whatever it takes” has become a rallying cry for them to continue their extraordinary policies. But we are past the height of the crisis, and the goal of policy today is to return to strong and sustainable growth.

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Interest-Rates

Monday, June 24, 2013

U.S. Treasury Bond Market Panic Profitable Plays for Investors / Interest-Rates / US Interest Rates

By: DailyGainsLetter

Moe Zulfiqar writes: It’s no secret: the Federal Reserve has kept U.S. bond prices higher and yields historically low by keeping interest rates low with multiple rounds of quantitative easing.

But now things have taken a minor turn, after the Federal Open Market Committee (FOMC) meeting minutes were released on June 19. “The committee currently anticipates that it will be appropriate to moderate the monthly pace of purchases later this year,” said Fed chairman Ben Bernanke. “And if the subsequent data remain broadly aligned with our current expectations for the economy, we will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year.” (Source: “Bernanke says Fed likely to reduce bond buying this year,” Reuters, June 19, 2013.)

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Interest-Rates

Saturday, June 22, 2013

Tapering the Fed QE Taper Talk / Interest-Rates / US Interest Rates

By: Peter_Schiff

As usual the Federal Reserve media reaction machine has fallen for a poorly executed head fake. It has been fooled by this move many times in the past and for its efforts it has tackled nothing but air. Yet right on cue, it took the bait once more. Somehow the takeaway from Wednesday's release of the June Fed statement and the Bernanke press conference is that the Central bank is likely to begin scaling back, or "tapering," it's $85 billion per month quantitative easing program sometime later this year, and that the program may be completely wound down by the middle of next year.

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Interest-Rates

Friday, June 21, 2013

Why U.S. Interest Rates Are Rising Sharply Even Though Inflation Is Non-Existent / Interest-Rates / US Interest Rates

By: InvestmentContrarian

Sasha Cekerevac writes: As we all know, the Federal Reserve has two mandates: keep the inflation rate low (officially, they have an optimal rate of two percent) and try to keep employment at or near maximum levels.

Because the extent of the recession has been so large and deep, in both of these measures, the Federal Reserve has not yet attained either goal. As a result, the Federal Reserve has enacted an extremely aggressive monetary policy stance.

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Interest-Rates

Thursday, June 20, 2013

Will Rising Interest Rates Ruin the Economic Recovery? / Interest-Rates / US Interest Rates

By: Clif_Droke

Sometimes words speak louder than actions. That has certainly been the case lately with the Fed hinting that it may taper off asset purchases by the end of this year.

On Wednesday, Fed Chairman Bernanke said the Federal Reserve would keep monetary policy loose a while longer but hinted that the days of easing may be numbered. Bernanke said that the Fed may wind down its quantitative easing (QE) program if the economy continues to improve.

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Interest-Rates

Friday, June 07, 2013

The Painful Price of Subsidized Money / Interest-Rates / US Interest Rates

By: Money_Morning

Martin Hutchinson writes: Bond yields have been generally declining, and the market as a whole is set up for them to continue the trend.

Not bad, right?

Wrong.

It's extremely dangerous - to all investors - because it can't go on forever. It's not a question of if this might happen, it's a question of when.

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Interest-Rates

Tuesday, May 14, 2013

Why I'm NOT Betting on Higher Interest Rates / Interest-Rates / US Interest Rates

By: DailyWealth

Dr. Steve Sjuggerud writes: Bill Gross is the world's greatest bond investor. But I'm not betting on his latest market call... And you shouldn't either.

Gross is to the bond market what Warren Buffett is to the stock market...

Just like Buffett, Gross has managed to trounce his peers for decades even as his assets under management have grown to an incredible size. Gross' firm PIMCO now manages over $2 trillion in assets, making it the world's largest bond investor.

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Interest-Rates

Wednesday, May 01, 2013

Financial Collapse - Is Bernanke Preparing to Jump Ship? / Interest-Rates / US Interest Rates

By: Graham_Summers

The Fed meets today and tomorrow. The ECB meets on Thursday. Those will be the defining market forces for the next three trading sessions.

There is little if any point in trying to trade this week (at least until Thursday). The Fed is notorious for leaking info to the well-connected. The most recent “accidental” sending of a report a day early is just the latest example.

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Interest-Rates

Wednesday, February 20, 2013

Why U.S. Interest Rates Are Rising / Interest-Rates / US Interest Rates

By: Michael_Pento

The interest rate on the Ten-year Note has risen from 1.58% on December 6th of last year, to as high as 2.03% by mid-February. Most equity market cheerleaders are crediting a rebounding economy for the recent move up in rates. According to my count, this is the 15th time since the Great Recession began that the economy was supposedly on the threshold of a robust recovery.

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Interest-Rates

Saturday, February 02, 2013

United States the Biggest Money Printing Loser / Interest-Rates / US Interest Rates

By: Peter_Schiff

In Switzerland, it's not just the clocks that are cuckoo. Over the past four years Swiss politicians and central bankers have gone on an unprecedented buying spree of foreign exchange reserves. In 2012, their cache swelled to as much as $420 billion worth of various currencies, primarily the euro. This figure is a seven-fold increase since 2008 and equates to 70% of the country's annual GDP. The sum translates to $200,000 per family of four, enough to keep the Swiss in clocks, chocolates, and fondue for many years to come. The Swiss leadership will claim the money has been "invested" with an eye to the future, but what they've done is impoverished themselves in the present. Although such a decision seems perverse, it makes perfect sense when seen through the lens of today's presiding economic thinking.

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Interest-Rates

Thursday, January 10, 2013

When Will U.S. Interest Rates Rise? / Interest-Rates / US Interest Rates

By: Clif_Droke

Recently I was asked a question that I suspect has been on many investors' minds. Here's the question: "Is it possible that the bond market will be the market to tumble into 2014, and as it does, the general market decline is mitigated by the rotation of money out of bonds and into stocks?"

Here's my answer: Anything is possible in today's upside-down world. As my late friend and mentor Bud Kress used to ask, "Does anything surprise you anymore?" But I'd have to say here - and I firmly believe Bud would echo this sentiment - if there's any validity to the 120-year Kress cycle, a sustainable rising interest rate trend isn't likely until after October 2014.

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Interest-Rates

Sunday, January 06, 2013

U.S. Interest Rates Forecast 2013, Don’t Fight The Fed! / Interest-Rates / US Interest Rates

By: Robert_M_Williams

I’ve been watching the Fed for years and like everyone else, I’ve always paid attention to the old saying that, “You don’t fight the Fed.” So it stands to reason that when the Fed says they’ll keep interest rates at zero well into 2015, you would expect rates to stay at or close to zero. They even went so far as to put an exclamation point on this policy two weeks ago when they announced that they were buying as much as 90% of all new issues. In short the US Federal Reserve is now acting as a buyer of last resort. That statement set off all sorts of warning bells in the deep recesses of my mind as my experience tells me that whenever a government is acting as a buyer of last, it’s in deep trouble. It brings back memories of many failed banana republics’!

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Interest-Rates

Monday, December 10, 2012

Side Effects from the Federal Reserve’s Monetary Policy Program / Interest-Rates / US Interest Rates

By: InvestmentContrarian

Sasha Cekerevac writes: The historic and unprecedented action by the Federal Reserve in enacting extremely loose monetary policy is an attempt to stimulate the economy. I’ve always felt that a central bank should have one mandate: the stability of the currency. The Federal Reserve has a dual mandate; in addition to keeping inflation in check, the American central bank also is attempting to lower the unemployment rate through monetary policy, a task not easily achieved.

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Interest-Rates

Thursday, November 29, 2012

Have Interest Rates Finally Bottomed? / Interest-Rates / US Interest Rates

By: Submissions

Timothy Lutts writes: The media in recent weeks have been full of stories about the coming Fiscal Cliff. No one knows exactly how Congress is going to deal with it, but one fairly common opinion is that taxes will go up on investment income.

As a result, many smart people have been making moves to take income now rather than in 2013 (or later.)

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Interest-Rates

Sunday, November 25, 2012

Is The US Bond Market Ponzi Scheme Coming To An End? / Interest-Rates / US Interest Rates

By: WavePatternTraders

The US Bond market has been in a bull market since the 1980s and although I originally was looking for a potential high early this year, we have not really progressed much further, expect that real rates have come down even lower and tested the prior December 2008 lows at 2.5%, potentially creating a double bottom.

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Politics

Monday, September 24, 2012

Ron Paul - Interest Rates Are Prices / Politics / US Interest Rates

By: Dr_Ron_Paul

One of the most enduring myths in the United States is that this country has a free market, when in reality, the market is merely the structural shell of formerly free institutions. Government pulls the strings behind the scenes. No better illustration of this can be found than in the Federal Reserve's manipulation of interest rates.

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Interest-Rates

Wednesday, July 25, 2012

Horse-Whipping Interest Rates to Zero / Interest-Rates / US Interest Rates

By: Rob_Kirby

Best Financial Markets Analysis ArticleNote how we barely see the hand of the ‘mystery’ rider [Geithner].  Note the conduit [crop] through which the force is applied.  Now note the animal that does the heavy lifting…

Interest Rate Swaps and the Long End of the Interest Rate Curve

The rest of the world has been a net seller of U.S. Treasuries for a number of years now.  It has been the U.S. Treasury – exercising / implementing Imperialist U.S. monetary policy through the trading desks of the magnificent five [J.P. M., BofA, Citi, Goldy and MS] – IN THE LONG END OF THE INTEREST RATE CURVE by selling tens upon tens of Trillions of Interest Rate Swaps [IRS] – deals between the banks [payers of fixed] with the Exchange Stabilization Fund [ESF] brokered by the N.Y. Fed trading desk.  This is what has kept things “appearing somewhat normal” in the long end of the interest rate curve.

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Interest-Rates

Wednesday, July 25, 2012

Fiat Currencies from Nullifying to Negative Nominal Interest Rates / Interest-Rates / US Interest Rates

By: Axel_Merk

Best Financial Markets Analysis ArticleThe once unthinkable might become policy: negative nominal interest rates. Investors should care as they may be increasingly punished for not taking risks. Yet masochistic investors believe they may be the prudent ones given the risks lurking in the markets. What are investors to do, and what are the implications for the U.S. dollar and currencies?

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Interest-Rates

Tuesday, July 03, 2012

Low Interest Rates Having No Effect on Economy / Interest-Rates / US Interest Rates

By: InvestmentContrarian

Danny Esposito writes: The Federal Reserve is frustrated that its low interest rate policy and thus low mortgage rates are having no effect on the U.S. economy. The Federal Reserve was hoping to stimulate borrowing to get the U.S. economy growing again.

The problem is the record number of people whom are long-term unemployed: 5.4 million were unemployed for longer than 27 weeks as of May.

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Interest-Rates

Thursday, June 28, 2012

When Zero Interest Rates Don't Work / Interest-Rates / US Interest Rates

By: Fred_Sheehan

Best Financial Markets Analysis ArticleJon Hilsenrath, the Wall Street Journal's ferret at the Fed, reports what the Federal Reserve wants the public to know while retaining anonymity. He found the professors in a stew. In the June 19, 2012, edition, Hilsenrath disclosed: "Fed officials have been frustrated in the past year that low interest rate policies haven't reached enough Americans to spur stronger growth, the way economics textbooks say low rates should. By reducing interest rates-the cost of credit-the Fed encourages household spending, business investment and hiring, in addition to reducing the burden of past debts. But the economy hasn't been working according to script."

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Interest-Rates

Thursday, June 07, 2012

Will the Fed Provide New Financial Accommodation Soon? / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleThe economic scene has changed in many ways since the April 24-25 FOMC meeting. Labor market data for May have been disappointing with a paltry 69,000 increase in payrolls and an 8.2% unemployment rate in May. Auto sales slowed slightly to an annual rate of 13.8 million units during May from a 14.4 million sales pace in April, real GDP eked out only a 1.9% increase in first quarter, and the financial crisis of the eurozone presents a significant downside risk not only to the US but also to the entire global economy. Market participants will be watching closely Chairman Bernanke’s testimony tomorrow at the Joint Economic Committee and Vice-Chair Janet Yellen’s remarks tonight.

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Interest-Rates

Thursday, April 26, 2012

OMC Meeting: Nature of Economic Data Will Dictate Next Policy Step / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleForward guidance for monetary policy of a low federal funds rate through late 2014 was retained, with a 9-1 vote in favor of this stance. President Lacker of the Richmond Fed dissented as he “does not anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014.”

The outcome of the April 24-24 FOMC meeting needs to be examined under three separate segments – the policy statement, highlights of press conference, and forecast.

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Interest-Rates

Saturday, April 14, 2012

Recent Federal Budgetary Trends: Facts, Not Opinions / Interest-Rates / US Interest Rates

By: Paul_L_Kasriel

The federal budget deficit reached its widest gap on a 12-month moving total basis in February 2010 at $1.478 trillion. Although remaining at astronomical levels, the budget deficit has been trending lower and stood at $1.246 trillion in March 2012. The year-over-year growth in the 12-month moving total of federal outlays peaked at 19.7% in July 2009. In March 2012, the year-over-year change in the 12-month moving total of federal outlays was minus 1.1%. The median growth in the year-over-year moving total of federal outlays from December 1955 through March 2012 is 6.6%.

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Interest-Rates

Friday, April 13, 2012

Different Opinions on Near Term Monetary Policy Prevail Within the FOMC / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Fed officials have voiced different opinions about the direction of monetary policy in the past two days. Among FOMC members who are wary of the current stance of Fed policy, President Kocherlakota of the Minneapolis Fed indicated the Fed needs to commence reversing the extraordinary accommodation in the next six to nine months.

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Interest-Rates

Wednesday, April 04, 2012

Fed Actions Speak Louder Than Words / Interest-Rates / US Interest Rates

By: Axel_Merk

Investors may be taken for a ride by today's Minutes of the Federal Open Market Committee (FOMC), which expand on the FOMC's March 13, 2012 statement; in the interim, we believe the Federal Reserve (Fed) Chairman Bernanke has gone out of his way to assure the markets that monetary policy will remain "highly accommodative," at least through late 2014.

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Interest-Rates

Thursday, March 29, 2012

ECB’s Cheap Funds – Waiting for a Turnaround in Lending / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleThe European Central Bank’s (ECB) financial accommodation through the longer-term refinancing operation (LTRO) in December 2011 and February 2012 amounting to over 1 trillion euros has stabilized financial markets. But, the desired impact on bank lending is not visible yet. Granted, it is a bit too soon to expect positive signs, but it is an important aspect to track in the near term. The objective of LTRO’s is to prevent a severe disruption of the flow of credit to businesses and households. The February LTRO reached a larger number of institutions compared with the December package and included expanded collateral that enabled smaller financial institutions to participate.

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Interest-Rates

Wednesday, March 28, 2012

What Causes Interest Rates to Rise / Interest-Rates / US Interest Rates

By: Michael_Pento

The prevailing notion among the main stream media and economists is that interest rates are rising because of improving economic growth. But like many of the readily accepted tenets of today’s world of popular finance, this too has its basis in fallacy.

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Interest-Rates

Tuesday, March 27, 2012

Bernanke – Additional Monetary Accommodation Is Entirely Possible / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Chairman Bernanke presented an extensive assessment of the labor market this morning. Bernanke repeated his depiction of the labor market as “far from normal,” which was his opinion at the February 29, 2012 semi-annual testimony to the Financial Services Committee of the House of Representatives. He listed positive developments in the labor market – the noticeable increase in payrolls in the three months ended February (+245,000, 3-month moving average), moderation in layoffs in the public sector, longer workweek, the drop in the unemployment rate from 9.0% in September 2011 to 8.3% in February 2012, and the declining trend of new jobless claims. On the negative side, he mentioned it is unclear if the recent gains in payrolls “will be sustained,” and listed another set of indicators to watch – jobless rate, long-term unemployment, and the rate of net hiring.

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Housing-Market

Tuesday, March 20, 2012

Keep Tabs on the Short End of the U.S. Interest Rate Curve / Housing-Market / US Interest Rates

By: Asha_Bangalore

The 10-year Treasury note yield was trading at 2.39% as of this writing, up from 1.96% on March 6 and 2.04% on March 12. The focus has been on the long end of the yield curve in the last few trading days. Moving over to the short end, the effective federal funds rate has moved up roughly seven basis points since early January (see Chart 1).

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Politics

Wednesday, March 14, 2012

America Mortgaged at an Adjustable Interest Rate / Politics / US Interest Rates

By: Peter_Schiff

Best Financial Markets Analysis ArticleThe Federal Reserve ran another "stress test" on major financial institutions and has determined that 15 of the 19 tested are safe, even in the most extreme circumstances: an unemployment rate of 13%, a 50% decline in stock prices, and a further 21% decline in housing prices. The problem is that the most important factor that will determine these banks' long-term viability was purposefully overlooked - interest rates.

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Interest-Rates

Wednesday, March 14, 2012

Are U.S. Interest Rates About To Rise? / Interest-Rates / US Interest Rates

By: Marty_Chenard

Will Interest Rates jump higher?

It could happen, as you will see on today's weekly chart of the 10 year yields .... symbol: $TNX.

The good news is that today's 10 year yield chart shows a five down trend. The bad news is that the one year weekly trend line is breaking out to the upside.

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Interest-Rates

Saturday, March 10, 2012

The Fed gets creative / Interest-Rates / US Interest Rates

By: Alasdair_Macleod

According to a story in Wednesday’s Wall Street Journal, the US Federal Reserve is considering buying long-term Treasury and mortgage bonds in return for deposits held at the Fed. There has been no comment from the Fed and the story might have been no more than a trial balloon, in which case Bernanke and Co may be considering skewing the yield curve so that long-term bonds are less attractive than the time-preferences set by the market.

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Interest-Rates

Monday, February 27, 2012

Short Term Interest Rates and Their Implications, Under the Radar / Interest-Rates / US Interest Rates

By: Tony_Caldaro

Best Financial Markets Analysis ArticleWhen a potental economic downturn is first sensed investors gradually start to shift into what is perceived as safe assets, namely Treasury bills, notes and bonds. As more and more investors pick up on this scenario a trend begins to appear. When economic data starts to confirm the downturn, the shift to safety turns into a long term trend and rates drop substantially. The opposite, of course, occurs during an economic upturn. When this occurs investors gradually shift out of the Treasury safe haven, and rates begin to rise. The initial shift, in both situations, is quite subtle, but measurable. We track these events using the 1 year T-bill.

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Interest-Rates

Wednesday, February 08, 2012

The Deception of 0% Interest Rates, High Costs and Capital Destruction / Interest-Rates / US Interest Rates

By: Jim_Willie_CB

Diamond Rated - Best Financial Markets Analysis ArticleThe interminable extension by the US Federal Reserve on the 0% rate into 2014 represents history in the making. It is the adoption of pure heresy in monetary policy, making it mainstream. Worse, it forces foreign central banks to adopt the same destructive policy in the Competing Currency War. Once upon a time, the highest priests from the central bank would admit in a guiding tone that accommodation on interest rates must be temporary. Nowadays it is engrained in the market mindset and permanent in monetary policy. The chronic 0% means the entire financial and monetary system is totally irreparably broken. The old pendulum where the tilt was toward bonds during recession, then toward stocks during recovery, that is all gone, shattered by the endless financial crisis. One must incorporate a new thinking, that the entire financial and monetary system is totally irreparably broken, then adapt in fierce defense. Larry Fink of Blackrock private equity firm made news today by suggesting that 0% bond yields offer no return on investment. How true! He did not offer any accurate reflection of reality that the financial structures are broken, nor that all attempts at remedy were flimsy and misdirected. He gave the ALL IN signal for buying stocks in 2012, thus putting on the risk trade. The immediate ancillary signal is to back up the truck and load up with GOLD also.

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Interest-Rates

Wednesday, February 08, 2012

Has Zero Interest Rate Policy Held Back Economic Recovery? / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleThe Fed instituted the zero-interest-rate policy (ZIRP) in December 2008 in response to the financial crisis. The ZIRP policy has been extended to late-2014 following the January 24-25 FOMC meeting, which will make it a six-year project. The current ZIRP policy of the Fed has its critics and advocates; Bill Gross presents arguments in today's Financial Times article for putting an end to the ZIRP policy because it is the root cause of economic woes today. His focus is on the absence of incentives for banks to find suitable projects to finance if they can park money at the Fed risk free for 25bps. He also adds that investors are most likely to shun Treasury securities as "there are multiples of downside price risk compared to appreciation."

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Interest-Rates

Friday, February 03, 2012

FOMC Pushes Unchanged Interest Rates Forecast Out to 2014, Fed Sets Inflation Target / Interest-Rates / US Interest Rates

By: Dr_Jeff_Lewis

Among the recent price consolidation, it should not be forgotten that the U.S. Federal Open Market Committee of the Federal Reserve Board decided to leave rates at 0.0% to 0.25% until at least late 2014, according to the FOMC statement released on January 25th.

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Interest-Rates

Wednesday, November 23, 2011

Manipulated U.S. Interest Rates Seesaw Gold Prices / Interest-Rates / US Interest Rates

By: John_Browne

This week, world attention finally shifted away from debt problems in Europe to the unresolved and worsening debt crisis here in the United States. The Congressional Super Committee, which had been created over the summer to postpone making tough cuts, chose to avoid responsibility itself. In so doing, the Committee has followed the path of least resistance and maximum irresponsibility. Given the likely after-effects, the outcome should be judged as criminal dereliction of duty. It should now be crystal clear to even the most casual observer that a solution to the U.S. debt crisis will not come from within, but will be imposed, perhaps brutally, from without.

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Interest-Rates

Friday, November 04, 2011

The Fed’s Forecast Begs for Action, Bernanke Hints at QE3 / Interest-Rates / US Interest Rates

By: Asha_Bangalore

The main conclusion from Bernanke’s press conference on November 2 is that the Fed has two choices. QE3 (quantitative easing) is one option given the Fed’s gloomy forecast (see Table 1). The precise timing, magnitude and composition of QE3 are unknown but Bernanke’s responses suggest that there is a willingness to engage, if essential. Large asset purchases are likely to be a combination of Treasury securities and mortgage-backed securities. The second alternative is its communication strategy much like the August announcement that the federal funds rate would be held at the current rate at the least until mid-2013. In other words, it would entail tying interest rate decisions to economic conditions in policy communications.

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Interest-Rates

Thursday, November 03, 2011

The Fed is Less Optimistic about Growth and Employment, But Stands Pat / Interest-Rates / US Interest Rates

By: Asha_Bangalore

The Fed left current policies intact and opted not to take any action today after implementing far reaching policy changes at the August and September FOMC meetings. Fed President Evans of the Chicago Fed cast the dissenting vote and would have preferred to provide more monetary policy accommodation. This is in stark contrast to the three dissents in August and September when Fed Presidents of Dallas, Minneapolis, and Philadelphia voted against the decision to hold the policy rate unchanged until mid-2013 and to undertake the maturity extension program of $400 billion dollars. Fed President Rosengren of Boston had cast a similar dissent in December 2007 arguing for a larger cut of the federal funds rate when the Fed lowered the policy rate by 25 bps to 4.25%.

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Interest-Rates

Saturday, October 29, 2011

U.S. Fed Operation Twist – Unmet Goal, For Now / Interest-Rates / US Interest Rates

By: Asha_Bangalore

The Fed put in place “Operation Twist” on September 21, 2011 with the goal of guiding long rates to a lower level. The 10-year Treasury note yield closed at a low of 1.72% on the day after the new policy was instituted. As of this writing, it is trading at 2.33%. The 30-year mortgage rate dropped briefly to 3.94% but is back up at levels seen just prior to the announcement (4.10%).

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Interest-Rates

Wednesday, October 26, 2011

Beware of Floating Interest Rates / Interest-Rates / US Interest Rates

By: Neeraj_Chaudhary

Best Financial Markets Analysis ArticleAccording to US government figures, the yield on the 10-Year US Treasury note reached a record low of 1.72% last month. Thus, despite the fact that government debt has exploded at a rate of more than $1 trillion per year, and the fact that S&P recently downgraded US debt, it appears that market demand for long-term US debt is nearly insatiable.

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Interest-Rates

Sunday, October 23, 2011

Fed Officials Offer Broad Hints That QE3 is Likely if Soft Patch Persists / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Vice-Chair Janet Yellen, Fed Governor Tarullo and Boston Fed President Rosengren have in the past two days voiced their support for more Fed action to support economic activity. Governor Tarullo indicated that there is “ample room” for the Fed to consider buying mortgage back securities. Two rounds of quantitative easing have helped to bring down mortgage rates, with QE1 (quantitative easing) appearing to have been the more successful (see Chart 1) program of the two programs.

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Interest-Rates

Wednesday, October 05, 2011

Will the Hawks of the FOMC Have to Reconsider? / Interest-Rates / US Interest Rates

By: Asha_Bangalore

The Bernanke Fed is currently divided about its view of the pace of future economic activity.  The vote at the August and September meetings included three dissents.  The dissenters held the view that additional monetary policy support is uncalled for and they remain concerned about future inflationary pressures. Charts 2-4 are telling exhibits that represent market assessment of future economic conditions. 

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Interest-Rates

Friday, September 30, 2011

Fed Officials Voice Dissenting Opinions Again / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleChairman Bernanke highlighted the gravity of the unemployment problem in the Q&A session in his speech after markets closed yesterday.

“This unemployment situation we have, the jobs situation, is really a national crisis,” We’ve had close to 10 percent unemployment now for a number of years and, of the people who are unemployed, about 45 percent have been unemployed for six months or more. This is unheard of.”

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Interest-Rates

Thursday, September 22, 2011

FOMC Engages in Operation Twist, Another Unconventional Step / Interest-Rates / US Interest Rates

By: Asha_Bangalore

The Fed left the federal funds rate unchanged, as expected, at 0.0-0.25%. The much awaited action called “Operation Twist” was part of the policy announcement. It was not an unanimous vote, three Fed Presidents -- Richard Fisher of Dallas, Narayana Kocherlakota of Minneapolis and Charles Plosser of Philadelphia – who are concerned about inflation dissented. These three Fed officials opposed the FOMC's August 9, 2011, decision that included an assurance of holding short-term interest rates near zero until mid-2013.

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Interest-Rates

Wednesday, September 21, 2011

Today's FOMC Meeting Will Prove That Team Bernanke is Out of Ideas / Interest-Rates / US Interest Rates

By: Money_Morning

Best Financial Markets Analysis ArticleKerri Shannon writes: If you're handicapping the U.S. Federal Reserve's two-day Federal Open Market Committee (FOMC) meeting that concludes today (Wednesday), you can make the following two predictions - and you'll almost certainly be right:

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Interest-Rates

Wednesday, September 21, 2011

Details to Note Prior to Fed Announcement on September 21 / Interest-Rates / US Interest Rates

By: Asha_Bangalore

It is widely anticipated that the Fed will announce new monetary policy support following the 2-day FOMC meeting on September 21, 2011. The Fed is expected to put in place “Operation Twist” to bring down rates at the long-end by purchasing long term U.S. Treasury securities to replace U.S. Treasury securities of short maturities in its portfolio. A large percentage of the Fed’s holdings are of 1-5 years maturity (see Chart 1).

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Interest-Rates

Wednesday, September 07, 2011

Awaiting Panic Low in U.S. Tresury Bond Yield / Interest-Rates / US Interest Rates

By: Mike_Paulenoff

Remarkably, 10-year yield has declined beneath its December 2008 "crisis" low of 2.04% to a new "generational low" of 1.94% so far, as global money continues to flow into U.S. Treasury paper (despite its suspect rating downgrade in August).

Purely from a technical perspective, all eyes now are on the behavior of weekly RSI (momentum), which so far has NOT confirmed recent yield weakness from 2.30% and which we should consider a potential warning signal that 10-year yield is in its price capitulation phase.

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Interest-Rates

Monday, September 05, 2011

Falling Interest Rates and the Fallacy of Monetary Deflation at the Zero Bound / Interest-Rates / US Interest Rates

By: Jesse

Best Financial Markets Analysis ArticleLiquidity Trap, Straight Up, with a Twist

I think we are all familiar with the recently popular viewpoint that as the financial economy crashed, what people called 'money destruction' would follow. Well actually the destruction of credit which some considered the same as money, as money itself. There were many detailed and complex thought experiments to explain why this must happen, involving monetary theories.

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Interest-Rates

Friday, August 26, 2011

Bernanke's Invisible Bazooka Ploy / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleBernanke is out of tools that make any sense even to him.

Seriously, what can he do he has not already done? Given that $1.6 trillion in excess reserves did not do a damn thing to spur lending or job creation, what possible good can another $1 trillion do?

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Interest-Rates

Tuesday, August 16, 2011

Smallest Yield Curve Gap Between US and Japan in 19 Years Confirming Deflation / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleCurve Watchers Anonymous notes amazingly low yields across the entire yield curve for the US, Japan, Germany, and the UK. Here is a chart I put together this evening.

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Interest-Rates

Saturday, August 13, 2011

The Zero Interest Rate Market Fix is In / Interest-Rates / US Interest Rates

By: Peter_Schiff

This week's wild actions on Wall Street should serve as a stark reminder that few investors have any clue as to what is really going on beneath the surface of America's troubled economy. But this week did bring startling clarity on at least one front. In its August policy statement the Federal Reserve took the highly unusual step of putting a specific time frame for the continuation of its near zero interest rate policy.

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Interest-Rates

Thursday, August 11, 2011

Fed's Extension of Low Interest Rates For Another Two Years Will Deliver Damaging Inflation / Interest-Rates / US Interest Rates

By: Money_Morning

Best Financial Markets Analysis ArticleDavid Zeiler writes: With little ammo left in its arsenal, the Federal Open Market Committee (FOMC) yesterday (Tuesday) was unable to offer jittery markets anything more than a two-year extension of the Fed's low interest rates.

Instead of promising to keep rates at their low 0% to 0.25% level for an "extended period" as it has in its past several meetings, the FOMC said it would maintain those rates "at least through mid-2013."

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Interest-Rates

Thursday, August 11, 2011

Why the Yield Curve is Steepening / Interest-Rates / US Interest Rates

By: Dr_Jeff_Lewis

Investors know that the yield curve can be used to forecast market movements.  When the difference in yield between short-dated debt and long-dated debt grows or shrinks, the next major move is a bearish or bullish signal for risk-related investments.

Now the yield curve is steepening significantly, but this time, the steepening of the yield curve shows indecision in lending, not indecision in investing.

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Interest-Rates

Wednesday, August 10, 2011

The Fed Holds Federal Funds Rate Unchanged Until Mid-2013, Also Leaves Door Open For More / Interest-Rates / US Interest Rates

By: Asha_Bangalore

The one-day FOMC meeting concluded with an unchanged federal funds rate, no surprises here.  In light of a string of recent weak economic reports a downgrade of its economic outlook was also not a surprise.  The FOMC now sees “downsides risks the economic outlook” as having increased compared with its assessment in June.  The Fed depicted labor market conditions to have “deteriorated,” household spending to have “flattened out,” the housing sector as languishing in a “depressed” state and the supply chain disruptions due to the natural disaster in Japan explaining only part of the economic slowdown. 

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Stock-Markets

Sunday, July 31, 2011

Interbank Credit Markets Show Low Systemic Risk / Stock-Markets / US Interest Rates

By: Steven_Vincent

Best Financial Markets Analysis ArticleTape action--market responsiveness to news, earnings and technical events--has been largely bullish as well. Psychology appears to be sufficiently negative to support a bottom as well. While doom and gloom are not at apocalyptic levels, there is a pervasive sense that after six months of grind and whipsaw, traders are tired and at a loss and are sitting on the sidelines waiting for the right cue. All in all, this is the stuff of which major bottoms are made. BullBear Traders are looking to build long positions as the market passes through a bottoming process soon, probably coinciding with the announcements of the downgrade of US sovereign debt and a DC debt deal. We are also keeping our eyes open to the possibility of a significant bearish market break.

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Interest-Rates

Thursday, July 28, 2011

The Fed’s Funny Money / Interest-Rates / US Interest Rates

By: Dr_Ron_Paul

Today's hearing is the second in a series examining the relationship between Federal Reserve policy and the performance of the United States economy. Today we are receiving testimony from the Federal Reserve banks. Of the half-dozen Reserve banks we contacted, only President Hoenig was willing to testify in front of this subcommittee, and we welcome him here today.

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Interest-Rates

Wednesday, July 06, 2011

How Commercial Paper Prices In Economic Recession / Interest-Rates / US Interest Rates

By: Tony_Pallotta

In what is becoming a multi part series on how various products price in recession tonight it is time to check out the commercial paper markets. Below are two charts (1) showing the last two recessions and how commercial paper rates performed and (2) commercial paper rates since Q2 2009. Both charts utilize non financial AA rated 30 and 90 day terms. The results were similar for financial paper as well.

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Interest-Rates

Tuesday, June 28, 2011

Big time trouble dead ahead thanks to the Federal Reserve / Interest-Rates / US Interest Rates

By: Submissions

Best Financial Markets Analysis ArticleSam Houston writes: The paper money dollar experiment of the last 40 years has reached an unsolvable impasse. Since 1971, when Nixon defaulted on the dollars convertibility into gold there has been no restraint whatsoever on the Federal Reserve's ability to finance the U.S. government's boondoggle spending programs both foreign and domestic.

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Interest-Rates

Sunday, June 26, 2011

More Treachery at the Fed? / Interest-Rates / US Interest Rates

By: Mike_Whitney

Best Financial Markets Analysis ArticleNo one expects the Fed to announce a rate-hike at the end of the today's FOMC meeting, but that doesn't mean there won't be a few surprises. The problem is that the recovery has stalled and the Fed can't decide whether we've just hit a "soft patch" or if it's something more serious. If it is more serious, then the Fed will need a contingency plan for kick-starting the economy. So, what's it going to be; another round of Quantitative Easing (QE), rate caps on short-term Treasuries or something else altogether? That's what the financial media will want to know, and only Fed chairman Ben Bernanke knows the answers.

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Interest-Rates

Saturday, June 25, 2011

Bernanke - Concern? / Interest-Rates / US Interest Rates

By: Ian_R_Campbell

When Ben Bernanke was appointed the Chairman of the U.S. Federal Reserve in early 2006 I then said he was the person that lost the game of musical chairs. Bernanke has always impressed me as a sincere and honest man who inherited problems not of his own making. I believe he works hard at - as golfer Bobby Jones might have said to him - playing the ball as it lies with little if any complaint. As best I know he is paid something north of U.S.$200,000 per year - hardly a princely sum for someone who holds one of the most important financial jobs in the world. How ridiculous is that when measured against the Wall Street, Bay Street, London City, and corporate executive salaries. One side of that equation is materially wrong - you decide which one.

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Interest-Rates

Thursday, June 23, 2011

U.S. Monetary Policy, A Case of Self-Induced Paralysis? / Interest-Rates / US Interest Rates

By: Paul_L_Kasriel

Best Financial Markets Analysis ArticleThis is a paraphrased title of an essay written in 2000 for the Peterson Institute for International Economics by then Princeton economics professor, Ben Bernanke. In Professor Bernanke's essay, "Japanese Monetary Policy" appeared in the title, not "U.S. Monetary Policy." In the essay, Professor Bernanke makes the case that the Japanese economy's weak real and nominal growth in the 1990s was the result of weak aggregate demand for goods and services, not aggregate supply constraints.

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Interest-Rates

Monday, June 20, 2011

June 21-22 FOMC Meeting - Preview / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleThe policy statement of the April 26-27 FOMC meeting mentioned that the "economic recovery is proceeding at a moderate pace and overall conditions in the labor market are improving gradually." This assessment has changed; Chairman Bernanke noted in the June 7, 2011 speech that "U.S. economic growth so far this year looks to have been somewhat slower than expected ... A number of indicators also suggest some loss of momentum in the labor market in recent weeks." The June 22 policy statement is most likely to reflect these developments.

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Interest-Rates

Friday, June 10, 2011

Bernanke's Credible Irresponsibility: The Logic Behind Cheap Money / Interest-Rates / US Interest Rates

By: Ben_Traynor

Best Financial Markets Analysis ArticleDoes Ben Bernanke want us to trust him? Maybe not…

IN THE murky realm of economic policy, things are not always what they seem.

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Interest-Rates

Wednesday, June 08, 2011

Bernanke - Accommodative Monetary Policy is Still Necessary / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleIf financial markets were expecting hints about QE3, Bernanke did not offer it in today's speech.  However, he noted that "the Committee also continues to anticipate that economic conditions are likely to warrant exceptionally low levels for the federal funds rate for an extended period." 

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Interest-Rates

Friday, May 27, 2011

Implication of U.S. Low Borrowing Rates for Savers, Don't Cry for PIMCO / Interest-Rates / US Interest Rates

By: Bloomberg

Best Financial Markets Analysis ArticlePIMCO's Bill Gross spoke to Bloomberg Television’s Tom Keene today. Gross said that “savers are being disadvantaged” 5 to 15 years when compared to creditors, as the U.S. keeps borrowing rates low to reduce its debt burden and that investors should look to corporate bonds instead of U.S. debt.

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Interest-Rates

Thursday, May 19, 2011

Methodology of U.S. Monetary Policy Interest Rate Tightening / Normalization Strategy / Interest-Rates / US Interest Rates

By: Asha_Bangalore

The minutes of April 26-27 FOMC meeting published today contain noteworthy insights about the future course of monetary policy.  Financial markets so far have digested the policy statement, published on April 27, and studied the details of the first press conference of Chairman Bernanke.  The Fed published economic projections at the close of the meeting in April which previously have been part of the minutes of the meeting. 

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Interest-Rates

Sunday, May 01, 2011

U.S. Treasury And Fed Put Out Cash, Raising Fist Pumping Crowd For Ben / Interest-Rates / US Interest Rates

By: PhilStockWorld

Courtesy of Lee Adler at the Wall Street Examiner : The market waltzed through a week of heavy Treasury auction supply, but it did not have to pay the piper until Friday and Monday, May 2, when all the new paper was due to settle. Thursday’s settlement actually saw bills paid down by $11 billion. That and $16 billion in POMO gave the markets plenty of juice for Ben’s coming out party. The US Government, just like Colonel Kadaffy, sent out wads of cash to its minions to insure that cheering, fist pumping crowds would show up for Ben’s appearance before the scripted, adoring mob of ink stained wretches. It was sickening. And I’m not even talking about the so called reporters in the room with him. I’m talking about the security market apparatus. Anyone who dared protest that the market show had gone too far was beaten to a pulp. Even venerable bear David Rosenberg of Gluskin Sheff was cowed into submission.

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Interest-Rates

Thursday, April 28, 2011

Fed Holds Policy Rate Steady, Signals Intention to Complete Asset Purchases and Maintain Balance Sheet Size / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleYesterday's post-FOMC meeting analysis has two components:  policy statement and Chairman Bernanke's press conference.  Starting with the policy statement, the Fed held the federal funds rate unchanged at the narrow band of 0 to ¼ percent.  There were no dissents, although in recent speeches, Fed Presidents Plosser and Fisher (both voting members) had voiced their concern about imminent inflationary pressures.

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Interest-Rates

Thursday, April 14, 2011

Why the FOMC Interest Rate Doves Have an Advantage at the April Meeting / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleEconomic recessions have differences and similarities.  In terms of the duration and depth of a recession, the most recent downswing in economic activity is a close cousin of the 1981-82 recession, which lasted 16 months.  During this recession, real GDP fell 2.6% from peak to trough and the unemployment rate shot up to 10.8% by December 1982.  The most recent recession is 18 months long, real GDP has dropped 4.1% from peak to trough, and the unemployment rate hit a high of 10.1% in October 2009. 

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Interest-Rates

Wednesday, April 06, 2011

Fed FOMC Minutes Show Divisions Over Inflation, QE and Interest Rates / Interest-Rates / US Interest Rates

By: Asha_Bangalore

The main message from the minutes of the March 15 FOMC meeting is that policy making will be contentious as the members of the FOMC hold different opinions about inflation and the need to continue the exceptional financial accommodation that is underway.  Although all members agree that the recovery is on a "firmer footing" and the housing sector remains in a slump, their views about inflation were significantly different. 

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Interest-Rates

Tuesday, April 05, 2011

Bernanke’s Speech Should Help to Clarify the Likely Direction of the Fed / Interest-Rates / US Interest Rates

By: Asha_Bangalore

The March employment report included several noteworthy aspects of strength in hiring.  The March 15 FOMC policy statement upgraded the Fed's assessment of the economy from the January evaluation.  At the same time, the housing market remains in a slump, there is severe financial stress at state and local governments, and there is considerable global economic uncertainty.  Chairman Bernanke is scheduled to speak this evening at a financial conference at the Federal Reserve Bank of Atlanta.  .Recent Fed rhetoric suggests that voting and non-voting members hold different opinions.  Chairman Bernanke may not have FOMC members voting in the same direction at the April 26-27 meeting.  In the interim, his speech today should suggest where he stands.  These are the latest comments of voting and non-voting members of the FOMC. 

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Interest-Rates

Thursday, March 24, 2011

What Should the Federal Reserve Do Next? / Interest-Rates / US Interest Rates

By: MISES

Best Financial Markets Analysis ArticleJames Grant writes: "What Should the Federal Reserve Do Next?" was the headline over the roundup of expert monetary opinion on the op-ed page of the September 9 Wall Street Journal. The experts couldn't seem to agree. Buy Treasuries by the boatload, one counseled. Do nothing of the sort, urged another. Hew fast to the Taylor rule, John B. Taylor, himself the author of the very rule, modestly proposed (i.e., fix the federal-funds rate at one and a half times the inflation rate, plus one-half times the shortfall of GDP from potential, plus one). The half-dozen authorities shared not much common ground except to ignore the principles on which the dollar was defined in 1792 and those on which the Federal Reserve was enacted in 1913. The burden of this essay is that they thereby missed the point.

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Interest-Rates

Thursday, March 24, 2011

Why Interest Rates Will Rise / Interest-Rates / US Interest Rates

By: Gary_North

Best Financial Markets Analysis ArticleThe world is on a Keynesian spending spree. Western central banks are inflating as never before in peacetime. Western governments are running massive budget deficits.

The European Union in 1997 established a Stability and Growth Pact, which set guidelines for fiscal policy: an annual deficit of no more than 3% of GDP and a total government-debt-to-GDP ratio of no more than 60%.

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Interest-Rates

Tuesday, March 15, 2011

Fed FOMC Interest Rate Meeting March 15th Preview / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleThe March 15 FOMC meeting is nearly certain to end with no change in the Fed's current monetary policy stance with an indication that it would continue the second round of quantitative easing.  Market participants are keeping a close eye on the policy statement to assess if there is a shift in the Fed's view.  A change in the Fed's outlook, if any, will be visible if the phrase "exceptionally low levels for the federal funds rate for an extended period" is modified.  Differences of opinion within the policy making committee about the quantitative easing program, involving a purchase of $600 billion Treasury securities, suggest a contentious debate.  In addition, an exit plan should be part of the agenda. 

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Interest-Rates

Monday, March 14, 2011

The Best Opportunity for Safe, Tax-Free Income You'll See in 2011 / Interest-Rates / US Interest Rates

By: DailyWealth

Best Financial Markets Analysis ArticleDr. David Eifrig writes: If you can ignore one of the media's biggest sources of hype, you'll see there's an amazing opportunity for income investors right now...

But if you're interested in collecting this income, I encourage you to act soon. It won't be available for long.

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Interest-Rates

Wednesday, March 09, 2011

Dallas Fed President Fisher Could Dissent if Crude Oil Prices Maintain Upward Trend / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleDallas Fed President Fisher indicated yesterday that he would vote to scale back or discontinue the Fed's Treasury securities buying program of $600 billion at the March 15 FOMC meeting.  Last week, Chairman Bernanke has indicated that only under conditions of strong sustained growth, expanding payrolls, and inflation readings that are consistent with price stability would the Fed consider terminating the program.  Current economic data indicate that the Fed is not even close to meeting these targets. 

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Interest-Rates

Friday, March 04, 2011

Fed and ECB - A World Apart / Interest-Rates / US Interest Rates

By: Axel_Merk

The U.S. Federal Reserve (Fed) and the European Central Bank (ECB) are divided by a common goal: price stability. Fed Chairman Bernanke has made it clear in his recent testimony and speeches that the Fed would react should food and commodity inflation lead to an increase in core inflation. Let's spell this out: the Fed is ready to R E A C T. We are not aware of any central bank that is proud of reacting, but rather acting preemptively to mitigate inflationary concerns; naturally, a central bank may often be forced to react, but to do so by design puts the cynical view that central bankers are too far behind the curve into a new light.

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Interest-Rates

Saturday, February 12, 2011

U.S. Treasury Yield Curve Starts to Decline / Interest-Rates / US Interest Rates

By: Donald_W_Dony

After three years of progressive climbing, the U.S. Yield curve is now starting to decline. Yield curves start to fall when short term bond yields rise at a faster pace then long bond yields. This event typically occurs in the first or second year of a bull market.
The economic factors that drive this movement (declining yield curve) can vary from one cycle to the next but the implications are normally the same. They represent growing economic strength.

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Interest-Rates

Friday, February 11, 2011

How to Profit from Rising Interest Rates / Interest-Rates / US Interest Rates

By: Terry_Coxon

Best Financial Markets Analysis ArticleTerry Coxon, The Casey Report writes: In the fall of 2008, the Federal Reserve responded to the Lehman bankruptcy by igniting a rapid expansion in the U.S. money supply. It did so because, by its lights, the immediate and obvious menace to the economy was a deflationary collapse, with one giant bankruptcy breeding another. And it went about the task without compromise; the monetary base more than doubled in less than a year, and the public's M1 money supply (checkable deposits plus hand-to-hand currency) jumped by 20%.

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Interest-Rates

Friday, February 11, 2011

What Dissension in the Fed's Ranks Means / Interest-Rates / US Interest Rates

By: Mike_Larson

Best Financial Markets Analysis ArticleA remarkable thing happened this week. Truly remarkable. But just in case it got lost amid the Egyptian chaos … coverage of the subzero temperatures up north … or the after-analysis of the Super Bowl, I’m going to shout it from the rooftops for you:

A couple of Federal Reserve officials actually stood up and said “Enough is enough!”

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Interest-Rates

Thursday, February 10, 2011

Insights from Q&A of Bernanke’s Testimony / Interest-Rates / US Interest Rates

By: Paul_L_Kasriel

Best Financial Markets Analysis ArticleChairman Bernanke's testimony today was a repetition of the February 3, 2011 speech at the National Press Club.  He stressed that the unemployment rate was unacceptably high and inflation was low.  In Q&A session, Representative Ryan questioned Chairman Bernanke about whether the Fed is monetizing debt.  Bernanke explained that "debt monetization" stands for a permanent change in money supply to finance the debt.  He went on to add that the Fed plans to reverse course, thus it is not debt monetization.  Money supply grew 4.2% from a year ago during the week ended January 24 (see Chart 1), which is hardly indicative of impending inflationary pressures.

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Interest-Rates

Tuesday, February 08, 2011

U.S. Low Interest Rates and High Deficits Aren't Helping Jobs Growth / Interest-Rates / US Interest Rates

By: Money_Morning

Best Financial Markets Analysis ArticleMartin Hutchinson writes: When the government released its latest jobs report last week, economists were initially cheered because it showed that the nation's unemployment level had dropped much more sharply than anyone expected.

But that cheer immediately turned into concern when the report also revealed that the U.S. economy created only 36,000 new jobs in January. That's so far below the norm for this stage of an economic recovery that it would take us 10 years to put back to work all the folks who have lost their jobs since 2007.

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Interest-Rates

Friday, February 04, 2011

Bernanke Reiterates January FOMC Policy Statement and Defends Fed’s Unconventional Monetary Policy / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleChairman Bernanke reiterated the main thrust of the January FOMC policy statement for the most part today. In addition, he defended the large-scale asset purchases that the Fed has undertaken. His remarks also included the fiscal policy challenges the nation currently faces.

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Interest-Rates

Thursday, January 27, 2011

FOMC Policy Statement - Status Quo is Also Noteworthy / Interest-Rates / US Interest Rates

By: Asha_Bangalore

The federal funds rate was left unchanged at 0%-0.25% as expected; it has held at this level since December 2008.  The Fed's plan to purchase $600 billion of Treasury securities has also been left in place along with the existing arrangement of reinvesting principal payments from its holdings of securities.  The vote was unanimous although four members of the voting panel were replaced for 2011.  Charles Plosser of the Federal Reserve Bank of Philadelphia, Richard Fisher of the Dallas Fed, Charles Evans of the Chicago Fed and Narayana Kocherlakota of the Minneapolis Fed are the replacements.  Of these four voting members, Fisher and Plosser have been critics about the second round of quantitative easing that is currently underway.  They have held the opinion that the current stance of monetary accommodation carries with it inflationary consequences that would be damaging to the economy.  However, unlike President Hoenig of the Kansas Fed who shared this opinion and dissented at each meeting in 2010, these two members voted along with majority in today's meeting. 

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Interest-Rates

Monday, January 24, 2011

Bernanke's Golden Dismount / Interest-Rates / US Interest Rates

By: Michael_Pento

There can be little doubt that Fed Chairman Benjamin Bernanke has been a very, very good friend to gold investors. However, some of those who have benefited from his largesse now fear that the recent selloff in gold indicates an imminent end to Bernanke's monetary high-wire act. Most assume that a cessation of the Fed's stimulative efforts, if it were to occur, would spell the end of gold's bull run. But a closer reading of Bernanke's economic philosophy and the Fed's own recent history, shows that once central banker begins a strenuous routine starts, it is very hard, if not impossible, for them to dismount.

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Interest-Rates

Saturday, January 22, 2011

U.S. Interest Rates Federal Open Market Committee Meeting Preview / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleThe Federal Open Market Committee (FOMC) meeting on January 25-26 is most likely to close without any change in Fed policy.  The FOMC will reaffirm its plan to complete the $600 billion purchase of Treasury securities.  The policy statement should contain modifications that would reflect the nature of latest economic reports.  The strength in recent retail sales data, the sluggish labor market, and ongoing challenges of the housing market will feature in the policy statement. 

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Stock-Markets

Thursday, January 20, 2011

Another Consequence of Zero Interest Rates / Stock-Markets / US Interest Rates

By: Andy_Sutton

Best Financial Markets Analysis ArticleOver the past two years, I have visited the topic of the consequences of our new zero rate world on several occasions. Despite media ramblings about ‘free’ money stimulating the economy and igniting another 2005-esque period of time, there have been several very negative consequences. Obviously, pathetic rates of return on what are traditionally referred to, as ‘risk-free’ assets are one well-understood development. There are others. This week we’ll take a look at the specter of zero-rates from a risk management perspective and demonstrate exactly how much our world has changed. Perhaps, ironically, the news is not all bad; there is a bit of a silver lining in here!

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Interest-Rates

Tuesday, January 18, 2011

U.S. Interest Rates, Economy, and the 1YR T-Bill / Interest-Rates / US Interest Rates

By: Tony_Caldaro

Best Financial Markets Analysis ArticleWhen one monitors the various markets for a number of years they accumulate tidbits of technical/economic information mostly from others, and some on their own. It is this “some on their own” that can give an investor just enough of an edge to be ahead of the crowd. It is common knowledge that the FED raises and lowers short term interest rates to meet their full employment/low inflation mandate. We can generally observe the movement of their rate decisions by monitoring the 1YR t-bill rate, as illustrated by the 30 year chart below.

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Politics

Monday, January 10, 2011

Toward Sensible Monetary Policy / Politics / US Interest Rates

By: Dr_Ron_Paul

Last week the 112th Congress was sworn in. I am pleased that I will be chairing the Monetary Policy Subcommittee of the Financial Services Committee, which has oversight of the Federal Reserve. Obviously, this position will facilitate my efforts to ensure the Fed provides the American people with more information about what they have been doing with and to our money. Not surprisingly, since my chairmanship was announced, apologists for the Fed have been recycling the old canard about how increased transparency threatens the Fed's so-called political independence.

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Interest-Rates

Thursday, January 06, 2011

2011: Year of the Yellow Brick Road / Interest-Rates / US Interest Rates

By: Axel_Merk

The Wizard of Oz would be proud of our policy makers: perception may be reality when it comes to investor confidence, even if we live in a fairy tale. However, investors that can afford to build a yellow brick road paved with gold may outshine those who build theirs with magic.

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Interest-Rates

Friday, December 31, 2010

Global Interest Rate Hiking Cycle Gathers Steam; What to Do … / Interest-Rates / US Interest Rates

By: Mike_Larson

Best Financial Markets Analysis ArticleNot a creature was stirring, not even a mouse, here in the U.S. markets late last week. But on Christmas Day, China’s central bank shocked investors …

Specifically, the People’s Bank of China raised short-term interest rates for the second time in the past three months.

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Interest-Rates

Thursday, December 30, 2010

The Fed’s Monetary Policy Is About to Run Into a BRIC Wall / Interest-Rates / US Interest Rates

By: Graham_Summers

Over the last few months I’ve noted repeatedly that THE key issue for the financial markets is the ongoing tension building between the Fed’s pro-inflation policy and China’s anti-inflation policy.

That tension just kicked it up a notch.

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Interest-Rates

Wednesday, December 29, 2010

Asset Speculation and Capital Destruction, The Cost Of 0% Money / Interest-Rates / US Interest Rates

By: Jim_Willie_CB

Diamond Rated - Best Financial Markets Analysis ArticleSince the early 1990 decade, the nation's maestros have promulgated the notion that cheap money is a beneficial factor for the sustenance of wealth, for economic development, for the standard of living, for the robust industries, in general for the American society. Nothing could be further from the truth, but even today the reckless US economists from the Keynesian Camp and their controllers from Wall Street have convinced the multitudes that cheap money is a good thing. Cheap money comes with a deadly ultimate cost. The inept professor occupying the US Federal Reserve Chairman post has gone on record claiming the US banking sector has a secret weapon in the Printing Pre$$ that it can use with zero cost, in its electronic form.

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Interest-Rates

Thursday, December 16, 2010

Quantitative Easing Unintended Consequences, Rising Interest Rates / Interest-Rates / US Interest Rates

By: John_Mauldin

Diamond Rated - Best Financial Markets Analysis ArticleCorrect me if I'm wrong, but I seem to remember that one of the reasons for QE2 was to lower rates on the longer end of the US yield curve. Clearly, that has not happened? Today we look at come of the unintended consequences of monetary policy, turn our eyes briefly to consumer debt, and wonder about deflating incomes. There are a lot of very interesting things to cover. (This letter will print long, but there are a lot of graphs. Usual amount of copy.)

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Interest-Rates

Wednesday, December 15, 2010

U.S. Treasury Bond Interest Rates Rising Steeply / Interest-Rates / US Interest Rates

By: Richard_Shaw

Contrary to Bernanke's goal of lowering interest rates by the QE II intervention, rates have been rising. In fact, they have begun to rise steeply as of late, with corresponding decline in bond prices. The following two charts for the 10-year Treasury bond illustrate the situation (top chart yield, bottom chart price). Better cash than bonds right now - or high quality, high yield growth US equities.

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Interest-Rates

Wednesday, December 15, 2010

FOMC Policy Statement, Fed on Watch-and-Wait Mode / Interest-Rates / US Interest Rates

By: Asha_Bangalore

The Fed is essentially on a watch-and-wait mode.  The asset purchase plan of $600 billion of longer-term Treasury securities, known as QE2, was left intact and the program is set to expire in June 2011.  The Fed made small modifications to the November policy statement.  The pace of economic recovery is now seen as "insufficient to bring down unemployment" vs. a more amorphous description in November that output and employment conditions are "slow."  The Fed upgraded its view about consumer spending and depicted it as "increasing at a moderate pace," while in November, the Fed saw consumer spending as "increasing gradually."  The retail sales report of November (see discussion below) justifies this modification.  The Fed indicated in November that "housing starts continue to be depressed," which is now revised to read as the "housing sector continues to be depressed."

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Interest-Rates

Monday, December 13, 2010

December 14 FOMC Meeting, Interest Rate Surprises Are Unlikely / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleThe last FOMC meeting for 2010 is likely to end without any surprises. The Fed is expected to maintain the current band (0%-25%) for the federal funds rate. There has been significant criticism about the $600 billion purchase of Treasury securities to provide an extra lift to economic activity and bring about a lower unemployment rate. The Fed projected lower interest rates and a depreciation of the dollar as a result of the second round of purchases of securities, termed as QE2. However, yields have risen since the announcement of QE2 on November 3. The 10-year Treasury note yield closed at 3.32% on December 10, the highest since June 10, 2010 (see Chart 1). Mortgage rates have risen close to 40bps since November 3 (see Chart 1).

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Interest-Rates

Saturday, November 20, 2010

Higher Interest Rate Yields Impact on Gold, Metals and Other Commodities / Interest-Rates / US Interest Rates

By: Jeb_Handwerger

Every precious metals investor should be concerned about China raising its rates and rising yields.  Rising rates in one of the fastest growing economies will affect precious metals investors.  Changes in the rates affect stock prices.  China is leading the world and we can see the fears are profound as sell offs this week were much stronger that any of the relief rallies.  If China’s market corrects then the commodity market which was fueling the equity market could experience a severe correction.  It is a domino effect.

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Interest-Rates

Tuesday, November 16, 2010

Analysis of QE2 Success or Failure at Lowering Bond Market Interest Rates / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleCurve Watchers Anonymous is investing Bernanke's claim that QE II has already been a success at lowering treasury rates.

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Interest-Rates

Friday, October 29, 2010

QE2 Sends U.S. Interest Rates Higher / Interest-Rates / US Interest Rates

By: Mike_Larson

Best Financial Markets Analysis ArticleSo if the latest reporting is to be believed, QE2 is a fait accompli.

The Wall Street Journal on Wednesday said the Federal Reserve plans to purchase “a few hundred billion dollars” worth of Treasuries over a period of “several months.” The Fed will stick largely with Treasury notes, rather than bills or bonds, with the lion’s share of the buying focused on securities with maturities between two and ten years.

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Interest-Rates

Thursday, October 14, 2010

A Plunge into a Monetary No Man’s Land / Interest-Rates / US Interest Rates

By: Bob_Chapman

Best Financial Markets Analysis ArticleThe question keeps swirling around regarding the Fed and just how much Treasury paper they can buy from the market under current rules. Our guess is about $1.7 trillion. A good part of that may well be in notes, which will probably keep long dated rates low. On the other hand they may increase the current limit, and buy everything in sight.

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Interest-Rates

Wednesday, September 22, 2010

FOMC Policy Statement, Fed's Level of Uneasiness Up Several Notches, Postpones Action / Interest-Rates / US Interest Rates

By: Asha_Bangalore

Best Financial Markets Analysis ArticleAs expected, the target federal funds rate was left unchanged.  President Hoenig of Kansas City cast the lone dissenting vote; he has taken the opposing stance in all meetings year-to-date. 

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Interest-Rates

Tuesday, September 14, 2010

Does the Fed Ultimately Control U.S. Interest Rates? / Interest-Rates / US Interest Rates

By: Michael_Pento

Best Financial Markets Analysis Article

In forecasting the consequences of current economic policy, many pundits are downplaying the risks associated with the surging national debt and the rapid expansion of marketable Treasury securities. Their comfort stems from the belief that a staggering debt burden will be manageable as long as interest rates remain extremely low; and, as they believe the Fed is in complete control of setting rates across the yield curve, they see no danger of rates ever rising past the point of comfort. Those who subscribe to this fairy tale forget that, in real life, there are many more hands on the interest rate steering wheel.

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Interest-Rates

Friday, August 27, 2010

Interest Rates Remain Low as Economic Concerns Persist / Interest-Rates / US Interest Rates

By: LiveCharts

National average mortgage rates remain historically low and there appears to be no end in sight to the Fed’s low to no interest rate policy. A less than stellar Commerce Department report on the second quarter gross domestic product Friday (August 27) morning is the latest contributor to the sense of pessimism hanging over the US economy.

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Interest-Rates

Wednesday, August 11, 2010

Impotent U.S. Fed 'Swings' Limp Appendage / Interest-Rates / US Interest Rates

By: Alex_Wallenwein

Bernanke and the other Fed governors know they are out of bullets, and that even if they had any bullets left, there would be nothing to shoot them at. So, the next best policy option on August 10, 2010 was for them to at least appear to be doing “something” to assure financial markets and institutional investors that they could rest (in peace?) in the secure knowledge that, because the Fed is doing “something” at least, there must still be something it can do to make the economy all better.

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Interest-Rates

Tuesday, August 03, 2010

Hedonic Adjustments and the Mulligans of Monetary Policy / Interest-Rates / US Interest Rates

By: Richard_Daughty

I knew it was going to be "one of those days" when, on the very first fairway, this new guy Bob says that he thought my tee shot had landed over there behind those trees, and how he is surprised to see that my golf ball is now sitting on the fairway, and another twenty yards further towards the hole, too.

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Interest-Rates

Friday, June 25, 2010

When It Comes to Increasing Aggregate Demand, What's Fiscal Policy without Monetary Policy? / Interest-Rates / US Interest Rates

By: Paul_L_Kasriel

Not much. Suppose the central government decides to increase spending without increasing taxes. Where do the funds come from? From entities who are willing to lend. If those lending entities are the nonbank public, for the most part, all this does is transfer spending power to the central government from these entities. Net, net, total spending in the economy does not increase. Rather, there is just a change in the distribution of spending.

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Interest-Rates

Tuesday, June 22, 2010

Fed’s Next Move is to Ease U.S. Interest Rates / Interest-Rates / US Interest Rates

By: Michael_Pento

The FOMC meets today to discuss their record-low interest rate policy. The announcement of their decision will be released on Wednesday. While no increase in interest rates is expected, there is little doubt amongst investors that the future direction for the central bank’s target rate will be up. In fact, Kansas City Fed President Thomas Hoenig has repeatedly expressed his desire for an increase in overnight lending rates to 1 percent from the current zero-0.25 percent range by the end of summer.

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Interest-Rates

Saturday, May 22, 2010

U.S. Interest Rates Remain on Hold or Heading Higher? / Interest-Rates / US Interest Rates

By: John_Mauldin

Diamond Rated - Best Financial Markets Analysis ArticleThe Case for a Fed Rate Hike
Employment Is Turning the Corner
The Headwinds of Money Supply
Who Stole the Inflation?
The Fed Is On Hold
An Inverted Yield Curve?
LA, Vancouver, San Francisco, and a First
Often Wrong, Seldom in Doubt

Everywhere there are arguments that we are in a "V"-shaped recovery. And there are signs that in fact that is the case. Today we will look at some of those, and then take up the topic of when the Fed will raise rates. We open the case and look at the evidence. Is there enough to come to a real conviction? I think there is. (And at the end of the letter I mention two conferences I am speaking at in the next few months, in Vancouver and San Francisco.)

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Interest-Rates

Friday, May 14, 2010

U.S. Solvency Contingent on Low Interest Rates / Interest-Rates / US Interest Rates

By: Michael_Pento

Best Financial Markets Analysis ArticleAccording to the Department of Treasury’s Auction Staff, the U.S. auctioned $8.8 trillion in Bills, Notes and Bonds in fiscal year 2009. That number is greater than the entire publicly traded debt, which is currently $8.4 trillion. The reason for the enormous amount of debt issuance is due to our surging annual deficits and rollovers that must occur more frequently because of the government’s decision to issue debt on the short end of the yield curve.

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Interest-Rates

Monday, April 26, 2010

Rising Interest Rates Right Around the Corner! Protect Yourself NOW! / Interest-Rates / US Interest Rates

By: Mike_Larson

Best Financial Markets Analysis ArticleBenjamin Franklin once called death and taxes the only certainties in this world. These days, I’d add rising interest rates!

I believe they’re coming … that the Federal Reserve is powerless to stop the inevitable … and that investors need to take protective action immediately.

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Interest-Rates

Friday, April 23, 2010

How the Banks Print Their Money / Interest-Rates / US Interest Rates

By: Adrian_Ash

Best Financial Markets Analysis ArticleGosh! Banks print money, bleeding tax-payers and savers for ink...

RESCUING THE BANKS was supposed to be about saving the savers.

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Interest-Rates

Thursday, April 15, 2010

Higher Rates are Foreboding Inflation / Interest-Rates / US Interest Rates

By: Michael_Pento

I know we were all told that it was not supposed to happen, but interest rates are rising on both U.S. government debt and mortgages. Fortunately for investors, market forces are not subjugated by media’s groupthink. Therefore, I was able to predict and profit from this nascent move up in rates, despite being vilified by those who told me that rates had already priced in the removal of government support.

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Interest-Rates

Monday, April 12, 2010

Surging U.S. Interest Rates Ahead / Interest-Rates / US Interest Rates

By: Mike_Larson

Best Financial Markets Analysis ArticleBrace yourself for one of the greatest interest-rate surges in decades — beginning first in the long-term Treasury markets … later spreading to shorter term Treasuries … and ultimately enveloping nearly every loan, debt, credit, and money market instrument on the planet.

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Interest-Rates

Tuesday, April 06, 2010

Where Are Mortgage Interest Rates Headed And Why? / Interest-Rates / US Interest Rates

By: John_Mauldin

Diamond Rated - Best Financial Markets Analysis ArticleThis week we look at two brief essays for your Outside the Box. The first is my friend Barry Habib talking to us about where mortgage rates are headed. Barry gives us a very simple, but logical analysis on why rates are headed up. Then we jump to Spencer Jakab writing in the Financial Times about the problems in the municipal markets. Seems we may be under funded on our public pensions by about $3.5 trillion. As a tease to his column:

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Interest-Rates

Saturday, March 20, 2010

Faber Expects U.S. Interest Rates to Stay at Zero Forever (Below the Rate of Inflation) / Interest-Rates / US Interest Rates

By: Submissions

Best Financial Markets Analysis Article"I think interest rates forever in the US will be at zero. By zero I mean below the rate of inflation" Marc Faber told CNBC. A slowing U.S. Economy will be followed by more money printing that will prevent a stock market crash. Eventually Governments will go bust, but before they will go bust they will print a lot of money.

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Interest-Rates

Friday, March 19, 2010

The Taylor Rule Tool for Predicting Fed Interest Rate Policy / Interest-Rates / US Interest Rates

By: Casey_Research

Best Financial Markets Analysis ArticleBud Conrad, Editor, The Casey Report writes: On March 3, I heard John Taylor over lunch at the San Francisco Federal Reserve. In his talk he reviewed the government’s bailouts and their effects on our economy. If you aren’t familiar with Taylor, he co-authored, along with Bob Hall, the macroeconomics textbook most widely used these days. In addition, he served as undersecretary of the Treasury in the early Bush years where, among other responsibilities, he was tasked with bringing a new currency to Iraq.

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Interest-Rates

Friday, March 05, 2010

U.S. Negative Real Interest Rates, Case-Shiller CPI Now Tracking CPI-U / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleIt's been about 4-5 months since I last talked about Case-Shiller CPI (CS-CPI). Case-Shiller CPI is formulated by substituting the Case-Shiller housing index for Owner's Equivalent Rent (OER) in the CPI for all urban consumers (CPI-U) index, commonly shortened to CPI.

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Interest-Rates

Thursday, March 04, 2010

Three ETFS to Protect From Rising Interest Rates / Interest-Rates / US Interest Rates

By: Ron_Rowland

Best Financial Markets Analysis ArticleWall Street is obsessed with interest rates. Many consumers are, too, especially anyone who wants to buy a home or car.

There’s a good reason for this: Debt — or you might call it “leverage” — is the lubricant that keeps the financial markets moving. Imagine a car without oil … it would soon grind to halt. The same is true of the modern economy.

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InvestorEducation

Thursday, February 25, 2010

Short-Term Interest Rates Create Long-Term Problems / InvestorEducation / US Interest Rates

By: Andy_Sutton

Best Financial Markets Analysis ArticleOne of the first orders of business that goes on during most initial meetings with a mainstream financial advisor is an inventory of assets, income, and other particulars. What generally follows next is series of pie charts that lumps you into one of three or four categories along with ‘projections’ of your future wealth if you’ll only contribute $3,000/year to that IRA for two decades. We’ve all heard the spiel. By contributing a mere pittance, you too can retire to millionaire acres in just 30 years.  While there have been many candidates for financial crime of the century (even though we’re only 10 years in), this one has to rank right up there.

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Interest-Rates

Tuesday, February 23, 2010

How the Fed Lost Control of Monetary Policy / Interest-Rates / US Interest Rates

By: Dr_Jeff_Lewis

While investors contemplate the recent increase in the Federal Funds rate, astute investors realize this arbitrary figure means nothing in regards to fighting inflation or decreasing the money supply.  Although the Federal Funds rate may have made an impact in 2008, its impact on the market was lost after the Fed expanded the balance sheet to buy illiquid assets in late 2008 through 2009.

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Interest-Rates

Monday, February 22, 2010

U.S. Federal Reserve Raises Discount Rate, What is the Economic Significance? / Interest-Rates / US Interest Rates

By: Barry_Grey

Best Financial Markets Analysis ArticleIn a move that took the financial markets by surprise, the US Federal Reserve Board on Thursday announced that, effective Friday, it was raising its discount rate by a quarter point, from 0.50 percent to 0.75 percent.

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Interest-Rates

Monday, February 22, 2010

Interest Rate Yield Curve Steepest In History, Is it Different This Time? / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleCurve Watchers Anonymous is once again taking a look at the yield curve looking for economic clues. Here are a few charts to consider.

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Interest-Rates

Friday, February 19, 2010

U.S. Treasury Debt Auctions Bombing, China Heading for the Hills … Higher Interest Rates Dead Ahead! / Interest-Rates / US Interest Rates

By: Mike_Larson

Best Financial Markets Analysis ArticleYou can’t count on Washington to proactively warn you about major economic and market problems …

blackhalfarrow Debt Auctions Bombing ... China Heading for the Hills ... Higher Rates Dead Ahead! Politicians and Fed policymakers failed to warn investors away from tech stocks during the Nasdaq bubble.

blackhalfarrow Debt Auctions Bombing ... China Heading for the Hills ... Higher Rates Dead Ahead! They failed to warn you in advance that the housing and mortgage markets would crash.

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Interest-Rates

Friday, February 19, 2010

Fed Raises Discount Interest Rate, Dollar Soars, Equity Futures Sink, What's It Really Mean? / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleThe Fed has been talking about its "exit strategy" for quite some time. Few believed he would pull the trigger on anything soon. Yet, Bernanke, unexpectedly raised the discount rate headed into options expiration.

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Interest-Rates

Friday, February 19, 2010

Is all this Fed Central Bank Exit Strategy Talk Warranted? / Interest-Rates / US Interest Rates

By: Tim_Iacono

Best Financial Markets Analysis ArticleBoy, for a group of policymakers at the nation's central bank who, in a best case scenario, are going to just sit on their hands for at least the rest of the year, there sure has been a lot of talk about an "exit strategy".

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Interest-Rates

Wednesday, February 17, 2010

The End of Low Interest Rates Is Near / Interest-Rates / US Interest Rates

By: Francois_Soto

Best Financial Markets Analysis ArticleLong Term Interest Rates To Double By 2020
We believe 10-Year U.S. Treasuries Government Yield is going to double over the next decade to eventually reach 10% by 2020. This prediction seems quite nonsensical as interest rates are hovering at their lowest level but secular financial environment changes occur most of the time when market participants are expecting it the least... And this might just be the case with long term interest rates!

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Interest-Rates

Tuesday, February 16, 2010

Fed Chooses to Exit through Eye of Needle / Interest-Rates / US Interest Rates

By: Michael_Pento

Ben Bernanke is making sure the Fed’s exit strategy goes as easily as a camel can pass through the eye of a needle. Instead of choosing to just sell assets and unwind the amount of securities it holds, the Fed chairman is seeking to be creative once again—as he was in the buildup of its balance sheet--and increase the amount of interest it pays on excess reserves. He said this in a prepared statement for the House Financial Services Committee that was released on Wednesday, “It is possible that the Federal Reserve could for a time use the interest rate paid on reserves, in combination with targets for reserve quantities, as a guide to its policy stance, while simultaneously monitoring a range of market rates.”

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Interest-Rates

Saturday, January 16, 2010

Rising Interest Iates and Lower Stock Market Before End of 2010 / Interest-Rates / US Interest Rates

By: Lorimer_Wilson

Best Financial Markets Analysis Article"The unprecedented run in the equity markets has boosted confidence among households and helped solidify the economy's shaky foundations. The improving economic outlook undoubtedly applies increasing pressure on the U.S. Federal Reserve and Bank of Canada to hike interest rates from record-low levels. Are traders and investors ready for the end of nearly free money?" asks Paul Vieira of The Financial Post in an article entitled 'The End of Free Money'. Below are edited excerpts from Vieira's article examining the repercussions such increased rates would have on the economies of Canada and the United States.

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Interest-Rates

Friday, January 15, 2010

Technical Update On IEF And TLT / Interest-Rates / US Interest Rates

By: Guy_Lerner

Best Financial Markets Analysis ArticleWhen we last looked at longer term Treasury yields, I stated that longer term Treasury yields were likely to undergo a secular trend change from down to up, but I had reservations because significant resistance was overhead, sentiment was too bullish for higher yields, and Treasury yields were greatly overbought. Honestly, last week I was not sure which way the bond market was going to go but I did offer up a game plan. This article will review the game plan that now have me more constructive on bonds or bearish on Treasury yields.

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Interest-Rates

Sunday, January 10, 2010

Bill Gross Say FED Will Exit Easy Monetary Policy, Quantitative Easing in March 2010 / Interest-Rates / US Interest Rates

By: G_Abraham

Best Financial Markets Analysis ArticleThe latest PIMCO newsletter suggests that 2010 will be year of caution and change. And yet he gives ample suggestions to the coming holocaust in financial markets if things do not go as planned.

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Interest-Rates

Friday, January 08, 2010

Cutting Through the Fed U.S. Interest Rate Tightening Claptrap / Interest-Rates / US Interest Rates

By: Mike_Larson

Best Financial Markets Analysis ArticleThere’s a real debate waging on Wall Street. Just like that famous scene from the 1974 movie Chinatown, where Faye Dunaway’s Evelyn Mulwray goes back and forth saying “She’s my daughter … She’s my sister,” today’s pundits keep debating the Fed. “The Fed will tighten” … “The Fed won’t tighten” … “The Fed will tighten” — the commentary shifts with each new data point that crosses the transom.

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Interest-Rates

Wednesday, January 06, 2010

Baum Makes Mincemeat of Bernanke's Twisted Zero Interest Rate Logic / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleIn Ivory Tower Doesn’t Have a Mortgage, Bloomberg columnist Caroline Baum makes mincemeat out of Bernanke's twisted defense of Fed policy.

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Interest-Rates

Thursday, December 24, 2009

The Zero Interest Rate Corner, Costs and Isolation 2010 / Interest-Rates / US Interest Rates

By: Jim_Willie_CB

Diamond Rated - Best Financial Markets Analysis ArticleThink isolation. Think monetization. Think trapped. Think Catch-22, no remotely viable option. Think motive for propaganda. Think end of the road in a gigantic US Treasury bubble, in the process of discredit. Think last resort of monetization, due to the absence of bidders at US treasury auctions. Think pressure like a vise. The USGovt is in a great big bind and chooses not to discuss it. As European nations ponder the plight of sovereign debt default, the United States compares an order of magnitude worse from deeper insolvency. A default closer to home is considered unthinkable. So was a broad mortgage market breakdown. So was an endless housing decline. So was an insolvent broken banking system. So were consecutive $1 trillion federal deficits. All were forecasted here.

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Interest-Rates

Wednesday, December 23, 2009

Bernanke Pushing His Luck on U.S. Interest Rates / Interest-Rates / US Interest Rates

By: John_Browne

Best Financial Markets Analysis ArticleThe vast majority of economists now say that the recession is over. Many expect nominal GDP growth as high as four percent in 2010. Now, with the economy assumed to be back on stable footing, some in the private sector are starting to talk about inflation.

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Interest-Rates

Tuesday, December 22, 2009

U.S. Treasury Bonds Spell Trouble for Bernanke Low Interest Rates / Interest-Rates / US Interest Rates

By: Marty_Chenard

Bernanke is vowing to keep interest rates low ... but, can he?

We say this because the market is not satisfied with receiving low yields when risk levels are perceived to be rising. That clearly showed up on the 10 year yields yesterday when the yield jumped up to 36.82.

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Interest-Rates

Monday, December 21, 2009

Why the Fed Will Be Sidelined in 2010 / Interest-Rates / US Interest Rates

By: Michael_Pento

The release of the Non-Farm Payroll Report for November along with the latest inflation data from the Bureau of Labor Statistics placed further into question the Federal Reserve’s free money policy. The spate of less bad news on the economy and increases in certain price levels has brought some of the bond vigilantes back from hibernation, while the cacophony from the hard-money guys (me chief among them) to raise interest rates is growing yet louder.

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Interest-Rates

Monday, December 21, 2009

Government Reports Reveal Economy Faces Unprecedented Risk of Rising Interest Rates / Interest-Rates / US Interest Rates

By: Martin_D_Weiss

Best Financial Markets Analysis ArticleNever before have I seen a broader range of investment opportunities as those opening up early in January!

But if you’re among those throwing caution to the wind … or if you’re slashing your keep-safe holdings to practically zero, then take a long, hard look at the …

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Interest-Rates

Thursday, December 17, 2009

Fed Tightening U.S. Interest Rates? Give Us a Break! / Interest-Rates / US Interest Rates

By: Axel_Merk

At the end of its scheduled two-day meeting, the Federal Reserve's Open Market Committee (FOMC) confirmed it will leave its target range for the federal funds rate unchanged and is on schedule to phase out various special liquidity programs. The Fed also confirmed it will continue to buy mortgage backed-securities (MBS) and expects to gradually slow the pace of these purchases; the Fed expects the entire $1.25 billion of MBS purchases to be executed by the end of the first quarter of 2010.

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Interest-Rates

Wednesday, December 16, 2009

Could the Fed Hike U.S. Interest Rates Sooner than Expected? / Interest-Rates / US Interest Rates

By: Gary_Dorsch

Diamond Rated - Best Financial Markets Analysis ArticleOne more Dance before Midnight Strikes, “As the old saying goes, what the wise man does at the beginning, fools do in the end,” said Warren Buffett, at Berkshire Hathaway’s Annual Meeting, in May 2006. “It’s like Cinderella at the ball. You know that at midnight everything’s going to turn back to pumpkins and mice. But you look around and say, one more dance, and so does everyone else. Everyone thinks they’ll get out at midnight. The party does get more fun, dance partners get prettier, - one more glass of champagne. And besides, there are no clocks on the wall. And then suddenly, the clock strikes 12, - and everything turns back to pumpkins and mice,” the sage of Omaha said.

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Interest-Rates

Wednesday, December 16, 2009

Why You Should Expect U.S. Interest Rates to Rise Soon / Interest-Rates / US Interest Rates

By: Claus_Vogt

Best Financial Markets Analysis Article

Last December, the yield on the 10-year Treasury bond fell to 2 percent, the lowest level in 40 years. The financial and economic crisis had investors heading for a safe harbor … and Fed members panicked. Deflation was the buzz word of the time.

If market forces had been allowed to take over and purge the system of all the imbalances, malinvestments, and excesses that characterized the bubble years, a deflationary wave would have swept the world. And after this sharp and deep cleansing process, a new healthy recovery would have begun.

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Interest-Rates

Sunday, December 06, 2009

Australian Luxury of High Interest Rates, Should the U.S. Follow Suit? / Interest-Rates / US Interest Rates

By: Oakshire_Financial

Best Financial Markets Analysis ArticleMany are quick to question the logic behind Australia's recent pattern of raising interest rates, citing the risk involved with this strategy and the "danger" it puts Australia's economy in by lowering housing demand and making financing more difficult for businesses. Some call it an outright mistake.

Boo hoo. The finance gurus of the world sound like a bunch of children jealous that their little brother opened a Christmas present that they asked for. 'Tis the season.

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Interest-Rates

Sunday, December 06, 2009

David Malpass: Near Zero Interest Rates are Hurting the Economy / Interest-Rates / US Interest Rates

By: Trader_Mark

Best Financial Markets Analysis ArticleFollowing up some excellent commentary he has been doing as a guest on CNBC (see video here) [Oct 16, 2009: The Inverse Correlation Between Stocks and the US Dollar in 1 Chart] David Malpass makes an eloquent argument on how near zero interest rates are hurting the US economy in a Wall Street Journal opinion piece

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Interest-Rates

Friday, November 27, 2009

New Record Low Two Year Treasuries Yield, Is This Start Of U.S. Dollar Rally? / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleIn the wake of the Dubai default (please see Dubai Defaults - Deflation In Action - Watched Pot Theory Revisited for details), I am up watching treasury yields.

Two year treasury yields plunged to an new all-time record low as the following Bloomberg table shows.

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Interest-Rates

Thursday, November 26, 2009

Zero Interest Rates, the Cruelest Tax of All / Interest-Rates / US Interest Rates

By: Sarel_Oberholster

Best Financial Markets Analysis ArticleThe zero-interest-rate policy of the Fed is sold to the public as a benign economic rescue in the public interest. The stark reality is that this policy is a disguised tax implemented by the Fed. It takes income from savers and hands it as a subsidy to borrowers. It also facilitates and funds the fiscal deficit policies of central government. Such a well disguised tax is a boon for governments. The cruelest tax of all is this 100 percent tax on interest income, disguised and rationalized as "good" policy.

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Interest-Rates

Saturday, November 21, 2009

The Unintended Consequences of the Federal Reserve's Low Interest Rate Policy / Interest-Rates / US Interest Rates

By: John_Mauldin

Best Financial Markets Analysis ArticleWhere the Wild Things Are
It Is Not Just Japan
The Euro-Yen Cross and the Dollar Carry Trade

Where the Wild Things Are is a beloved children's book and now a beautiful movie. But in the investment world there are really scary wild things lurking about in the hidden recesses of the economic landscape. Today we look at one of the unintended consequences of the Federal Reserve's low interest rate policy.

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Interest-Rates

Monday, November 16, 2009

The Fed's Policy of Near Zero Interest Rates / Interest-Rates / US Interest Rates

By: Bob_Chapman

Best Financial Markets Analysis ArticleOne of the outcomes of Fed policy of near zero interest rates is that seniors cannot live on an income of 1-1/% and that pension funds, insurance companies and endowments cannot fulfill their commitments. As yields eventually rise, although the Fed has signaled that is at least a year away, and if Japan is any guideline, we could be 19 years away from solving the problem of fiduciaries.

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Stock-Markets

Tuesday, November 10, 2009

Why is the Stock Market Rising When The Economic Recovery is Weak? / Stock-Markets / US Interest Rates

By: John_Mauldin

Diamond Rated - Best Financial Markets Analysis Article"Why" many ask, "is the stock market going up when the bond market is telling us the recovery will be tepid? Isn't there a disconnect?" And the answer is that there is, and this week good friend and fishing buddy Paul McCulley of PIMCO fame discusses that very topic with his usual insight and wit. He poses the conundrum that those expecting a "V" shaped recovery have pushed risk assets up quite high, and that the real risk to their position is that they in fact get a "V" shaped recovery. And yet, they could go higher and into bubble territory.

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Interest-Rates

Tuesday, October 20, 2009

If Bernake Doesn’t Raise The Fed Interest Rate Very Soon There Will Be BIG Trouble / Interest-Rates / US Interest Rates

By: Andrew_Butter

Best Financial Markets Analysis ArticleThe debate about whether it was Alan Greenspan’s “fault” will continue for generations, the “other side” summed up their position nicely in a quip that came up in the debate about whether to let the Fed have more power, “ That’s like buying your teenager a sports car after he wreaked the family saloon”.

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Interest-Rates

Saturday, October 17, 2009

The Fed Does Not Care About the Dollar, Easy Money is Here to Stay / Interest-Rates / US Interest Rates

By: Mike_Larson

Best Financial Markets Analysis ArticleEvery so often, someone decides to pick a fight with me over the Federal Reserve. They say I’ve got it all wrong. They say the Fed is going to prove its mettle. They say that foreign central banks are crying “Uncle” over the dollar, and that this will force the Fed to reverse course and start raising rates.

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Stock-Markets

Wednesday, September 30, 2009

Stock Market Investors Don’t Fight the Fed / Stock-Markets / US Interest Rates

By: Hans_Wagner

Best Financial Markets Analysis ArticleMartin Zweig, in his investment book “Winning on Wall Street” points out investors should not “fight the Fed”. In his book, he discusses the relationship between the discount rate and the performance of the US stock market. As he showed, most of the time, a rise in the discount rate leads to a lower average share prices. A drop in the discount rate leads to higher average share prices. Another concept called “two tumbles and a jump” indicates that two decreases in the discount rate within a six-month period lead to a jump up in the stock market. On the other hand, one or two rate increases within a 6-month period are moderately bearish for stocks. Three or more rate increases are extremely bearish.

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Interest-Rates

Tuesday, September 22, 2009

When Will the Fed Start Raising U.S. Interest Rates? / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleCalculated Risk has an interesting chart and discussion on the unemployment rate and Fed rate hikes.

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Interest-Rates

Saturday, September 19, 2009

Keynesian Economics and Negative Interest Rates / Interest-Rates / US Interest Rates

By: Gary_North

Diamond Rated - Best Financial Markets Analysis ArticleThere is considerable discussion about the possibility that the Federal Reserve could and possibly should create a monetary environment in which interest rates are negative.

First, why should it do this?

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Interest-Rates

Sunday, August 23, 2009

Big Interest Rate Move Around the Corner? / Interest-Rates / US Interest Rates

By: Marty_Chenard

Best Financial Markets Analysis ArticleInterest rates ... housing demand ... housing affordability ... bank loans ...

Headline confusion? ... Here are the current housing related headlines on a Yahoo news search:

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Interest-Rates

Tuesday, August 18, 2009

Bernanke’s Federal Reserve Interest Rate Indecision Meeting / Interest-Rates / US Interest Rates

By: Money_and_Markets

Best Financial Markets Analysis ArticleNilus Mattive writes: Last week, the Federal Reserve held a two-day interest rate policy meeting, and nobody was surprised by their lack of action. Heck, it’s unlikely that we’re going to see a real change in their target rate for a while yet.

But I do think there were some important suggestions buried in their comments, and I want to talk about those today. Plus, I want to throw my hat into the ring on the “Will Bernanke get another term?” debate as well.

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Interest-Rates

Thursday, August 13, 2009

Bernanke, Do You Have The Cojones To Raise U.S. Interest Rates? / Interest-Rates / US Interest Rates

By: Mike_Whitney

Diamond Rated - Best Financial Markets Analysis ArticleMike Whitney writes: Booyah. It's morning in America. The jobless numbers are stabilizing, the stock market is sizzling, quarterly earnings came in better than expected, traders have turned bullish, housing is showing signs of life, and clunker-swaps have given Detroit a well-needed boost of adrenalin. Even Cassandra economists --like Paul Krugman and Nouriel Roubini--have been uncharacteristically optimistic. Is is true; did we avoid a Second Great Depression? Is the worst really behind us?

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Interest-Rates

Monday, July 27, 2009

Real U.S. Treasury Yields Highest In History / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleBloomberg is reporting Real Yields Highest Since 1994 Aid Record Debt Sales.

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Interest-Rates

Wednesday, July 08, 2009

The True Cost of 0.25% Interest Rate / Interest-Rates / US Interest Rates

By: Adrian_Ash

Best Financial Markets Analysis Article"Hey! If banks won't lend at low-to-zero rates of interest, maybe we should try sub-zero rates instead..."

IT'S NO BIG DEAL at present – only about $200 in fact.

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Interest-Rates

Sunday, June 14, 2009

Interest Rate Hikes Coming as Investors Return to Risky Assets / Interest-Rates / US Interest Rates

By: Prieur_du_Plessis

Best Financial Markets Analysis ArticleBloomberg: Pimco says “rate hikes will be some time in coming” “Pacific Investment Management Co., which runs the world’s biggest bond fund, said the economic outlook ‘looks bad’ for most of the world and central banks will refrain from raising interest rates.

“‘Rate hikes will be some time in coming,’ Andrew Balls, a managing director for the company in London, wrote in a report on the company’s web site.

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Economics

Friday, June 05, 2009

U.S. Fed Throttling the Economic Recovery? / Economics / US Interest Rates

By: Andy_Sutton

Best Financial Markets Analysis ArticleDespite the calm appearance on the economic waters of late, there is quite a bit of turbulence building beneath the surface on a multitude of fronts. Several developments have emerged that fly directly in the face of the idea that we’re headed for a green shoots recovery. Even more surprising, when you take a deeper look at these issues, some rather remarkable inconsistencies emerge in that the methods being used in some critical areas virtually guarantee that they will not be successful. We’ll take a look at two of these areas, but first, let’s discuss manoeuvring room.

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Interest-Rates

Wednesday, June 03, 2009

Why Interest Rates are Rising / Interest-Rates / US Interest Rates

By: Marty_Chenard

Best Financial Markets Analysis ArticleToday ... I must speak about long term interest rates and mortgages.

Yesterday, the 30 year yields closed at 44.89. At the end of December, the 30 year yields were only 25.19 ... that was a significant rise (see the chart below). 30 year mortgage rates got down as low as 4.5%, and yesterday they ranged from 5.25% to 5.375%.

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Interest-Rates

Thursday, May 07, 2009

Will Interest Rates Sky Rocket as Inflationary Pressures Build? / Interest-Rates / US Interest Rates

By: Money_Morning

Best Financial Markets Analysis ArticleMartin Hutchinson writes: U.S. Treasury bond yields are going higher - much higher. And that’s even before we factor in the likely effects of rising inflation, which we haven’t seen yet, but can certainly anticipate.

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Interest-Rates

Monday, May 04, 2009

Sorry Ben Bernanke, You Don’t Control Long Term Interest Rates / Interest-Rates / US Interest Rates

By: Michael_Pento

Best Financial Markets Analysis ArticleIt is disappointing to discover that the Harvard- and M.I.T.-educated Ben Bernanke did not learn while attending school that long-term interest rates must be set by the free market. Belatedly, the Chairman of the Federal Reserve is about to learn this valuable and costly lesson because these rates cannot be manipulated lower by any central bank for a great length of time.

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InvestorEducation

Monday, April 20, 2009

Harvard Professor Says Cut U.S. Interest Rates Below Zero / InvestorEducation / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleTime For Mankiw To Resign - On Saturday I checked my watch to verify the date. A quick check showed it was April 18. Just to be sure I asked my wife Joanne and she assured me it was the 18th. Likewise my computer said it was the 18th.

For a brief moment, I thought we had flashed back in time and it was April 1.

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Interest-Rates

Tuesday, March 17, 2009

The Real Ponzi Scheme– Unreal Interest Rates / Interest-Rates / US Interest Rates

By: Rob_Kirby

Diamond Rated - Best Financial Markets Analysis ArticleRecently, former chairman of the Federal Reserve – Alan Greenspan – penned an editorial, “ The Fed Didn't Cause the Housing Bubble ”. It was published in The Wall Street Journal March 11, 2009 .

In the article Mr. Greenspan attempts to blame today's global financial crisis on “too-low mortgage rates” between 2002 and 2005 which led to a real estate bubble.

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Interest-Rates

Saturday, March 07, 2009

Inflection Point in U.S. Treasury Bond Interest Rates Near? / Interest-Rates / US Interest Rates

By: Michael_Pollaro

Best Financial Markets Analysis ArticlePity the tortured Treasury bond buyer; what to do, what to do. These headlines from Bloomberg news chronicle the struggle. On March 4th :

Treasuries Fall on Looming Auctions, Deficit Funding Concern
By Susanne Walker
March 4 (Bloomberg) – Treasuries fell as stocks rose and traders speculated the U.S. will sell $60 billion of notes and bonds next week after the worst two months of losses in government debt in five years

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Interest-Rates

Saturday, December 20, 2008

Fed Targeting Long-term Interest Rates to Force Mortgage Rates Lower / Interest-Rates / US Interest Rates

By: John_Mauldin

  • Diamond Rated - Best Financial Markets Analysis ArticleI Meant to Do That
  • The Lights of Myanmar
  • Some Good News for Borrowers
  • Madoff May Give Us a Sell-Off

The Fed has taken interest rates to zero. They have clearly started a program of quantitative easing. What exactly does that mean? Are we all now Japanese? Is the Fed pushing on a string, as Japan has done for almost two decades? The quick answer is no, but the quick answer doesn't tell us much. We may not be in for a two-decades-long Japanese malaise, but we will experience a whole new set of circumstances. In what will hopefully be a shorter holiday version of the e-letter, I will tackle these questions and more.

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Interest-Rates

Wednesday, December 17, 2008

Fed Fights Deflation with Zero Interest Rates / Interest-Rates / US Interest Rates

By: Prieur_du_Plessis

Best Financial Markets Analysis ArticleThe US Federal Reserve yesterday pulled out all the stops in a frantic effort to save the US economy from collapse and stem the deflationary forces. The Fed funds rate was slashed from 1% to a target range between 0 and 0.25% – the lowest the central bank's key rate has been since records began in 1954.

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Interest-Rates

Wednesday, December 17, 2008

Quantitative Interest Rate Easing American Style: Free Money / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleThe Treasury rally continued in spectacular fashion in conjunction with the ZIRP Arrival: Fed Targets Interest Rates 0 to 1/4 Percent .

From the FOMC Press Release . The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level.

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Interest-Rates

Tuesday, December 16, 2008

Zero Interest Rates Policy Arrives as Fed Targets 0% to 0.25% / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleEffective today, the Fed is done cutting rates. ZIRP has arrived. The Fed is targeting interest rates in a range of 0 to 1/4 percent as noted today's FOMC Press Release .

Release Date: December 16, 2008 - For immediate release

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Interest-Rates

Thursday, November 20, 2008

Credit Collapse, U.S. Treasury Yields Fall to Record Lows / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleOnce again treasury bears who do not understand the implications of a collapse in credit are taking a beating as Treasury Yields Drop to Record Lows .

Treasury yields declined to record lows, with two-year notes dropping below 1 percent for the first time, as global stocks slumped and a deepening recession drove investors to the safest assets.

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Interest-Rates

Wednesday, November 19, 2008

Economic Forecast, Peering into a Debt Ridden Future / Interest-Rates / US Interest Rates

By: Mick_Phoenix

Diamond Rated - Best Financial Markets Analysis ArticleWelcome to the weekly report. This week we look at some longer term indicators that will help identify when a turning point in the economy has arrived and why you should cancel Christmas, or at least go back to its traditional meaning, forgoing the pointless consumerism that surrounds it.

Before we start, you may have wondered (or not) why the weekly report wasn't around. I have spent the past 3 weeks laying out the groundwork for an attempt to peer into the longer term future. Subscribers have seen all 3 articles, culminating in the new scenario. I have released the first 2 articles to the public, the final part will also be released but not for awhile yet.

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Interest-Rates

Wednesday, November 12, 2008

How Low Will the Fed Funds U.S. Interest Rates Go / Interest-Rates / US Interest Rates

By: Hans_Wagner

On Wednesday October 29th, the Federal Reserve lowered the Fed Funds rate by 50 basis points to 1.0%. This comes on top of an earlier rate reduction on October 8, 2008 of 50 basis points. The rate is now at the level former Fed Chairman Alan Greenspan kept during 2003 and 2004. This raises the question can and should the Fed lower rates further?

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Interest-Rates

Thursday, November 06, 2008

UK Interest Rate Cut by 1.50% / Interest-Rates / US Interest Rates

By: Nadeem_Walayat

The Bank of England surprised all market participants by cutting UK interest rates by 1.5%, far more than the consensus forecast of 0.5%, and even greater than the Market Oracle forecast cut of 1%.

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Interest-Rates

Saturday, November 01, 2008

Fed Desperate U.S. Interest Rate Measures  / Interest-Rates / US Interest Rates

By: Tim_Wood

Best Financial Markets Analysis ArticleThe Fed's action to either raise or lower rates has become a major focal point for the markets in recent years. It seems that the vast majority of the public believes that the Fed is actually controlling interest rates and as a result that they are controlling the credit and equity markets. For a week before the Fed meeting it seems that the entire global markets focus on “what the Fed is going to do.” Will they cut a quarter, will they cut a half or will they not cut at all? Then, after the meeting the talking heads and analysts sit around and try to analyze the meaning of their “Fed Speak.” This is a joke. I am about to show you the proof that the Fed follows the short-term credit market and that in reality they do not lead. The data simply does not support this widely held belief. I realize that this may come as a shock to you, but reality is what it is. The data speaks for itself.

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Interest-Rates

Friday, October 31, 2008

U.S. Fed Zero Interest Rate Policy Coming? / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Best Financial Markets Analysis ArticleThe Fed did not want to cut the Fed Funds Rate below 2%. And because Congress recently granted authority for the Fed to pay interest on reserves, Bernanke thought incorrectly that he could keep rates above 2%. So much for that academic theory. Now many are wondering if ZIRP (Zero Interest Rate Policy) is coming to the Fed.

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Interest-Rates

Wednesday, October 29, 2008

U.S. Fed Anticipated 0.5% Interest Rate Cut / Interest-Rates / US Interest Rates

By: Ashraf_Laidi

Best Financial Markets Analysis ArticleThe main question is whether today's anticipated Fed rate cut will succeed in maintaining the current boost to global risk appetite, regardless of the size of the easing. Since the beginning of the market crisis 7 weeks ago, the Federal Reserve has proven more creative in its overall actions than surprisingly dovish in its rate cuts. At the last scheduled FOMC meeting, the Committee kept rates unchanged despite the collapse of Lehman Bros but offered a bridge loan to AIG. In keeping with current Modus Operandi, a 50-bp rate cut in the fed funds rate is the most likely scenario, while a 25-bp easing is more plausible than 75-bps.

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Interest-Rates

Friday, October 10, 2008

U.S. Fed Fears Loss of Power in Preventing Financial Collapse / Interest-Rates / US Interest Rates

By: Money_Morning

Best Financial Markets Analysis ArticleShah Gilani writes: The truth? You can't handle the truth.”

The truth is, the U.S. Federal Reserve does not directly control the Federal Funds rate, and its efforts to reduce the benchmark rate from 2.0% to 1.5% may do more damage than good – though for reasons you'd never guess. Attempts to lower the Fed Funds rate could irreparably damage Fed credibility and may actually narrow the Fed's credit-crisis-management options.

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Economics

Friday, October 03, 2008

US Payrolls Signalling Recession and US Interest Rate Cut / Economics / US Interest Rates

By: Ashraf_Laidi

Best Financial Markets Analysis ArticleSeptember payrolls fell by 159K, worst decline since May 2007, while the unemployment rate held at 6.1%. Although unchanged, the unemployment rate is widely expected to breach above the 6.3% rate in coming months, which would be the highest jobless rate since 1994. Our long held base call of 50-bps easing before year-end is now completely priced in the market, with about 55% chance of the cut emerging before the October 29 meeting.

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Interest-Rates

Wednesday, September 17, 2008

Federal Reserve Holds Interest Rates Defying Wall Street / Interest-Rates / US Interest Rates

By: Money_Morning

Best Financial Markets Analysis ArticleMartin Hutchinson writes: The U.S. central bank's Federal Open Market Committee (FOMC) yesterday (Tuesday) left the benchmark Federal Funds rate target at 2.0%, after many had expected the central bank policymaking committee to cut rates in the wake of the Lehman Brothers Holdings Inc. ( LEH ) collapse.

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Interest-Rates

Friday, September 12, 2008

FOMC US Interest Rate Meeting of September 16th / Interest-Rates / US Interest Rates

By: Joseph_Brusuelas

Best Financial Markets Analysis ArticleNearly ten years ago the Federal Open Market Committee convened a special meeting to address the problems in U.S. financial markets regarding the failure at Long Term Capital Management. It is not without irony that one decade later the Fed and the U.S. Treasury are addressing an infinitely more complex problem with respect to Fannie Mae and Freddie Mac, while at the same time contemplating the potential failure of major investment and commercial banks.

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Interest-Rates

Wednesday, September 03, 2008

Real US Interest Rates Are Too High / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Diamond Rated - Best Financial Markets Analysis ArticleI am going to make a shocking statement. Here it is: Real interest rates are high. Before stating the basis for such a seemingly wild claim it is important to define some terms. In this case "real" means inflation adjusted.

Of course this means we have to agree on the meaning of the word "inflation". For this discussion I am going to waver from my usual stance that "Inflation is an increase in money supply and credit" to something mainstream.

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Interest-Rates

Thursday, August 28, 2008

Treasury Dull Range bound Holiday Season Trading / Interest-Rates / US Interest Rates

By: Levente_Mady

On the financial sector front, there is just no relief in sight. Credit spreads remain under pressure. The stock price of Fannie Mae and Freddie Mac continue to plunge. Swap spreads are wider again. LIBOR is trading and levels indicative of severe financial distress. The good news is that the rest of the market is hanging in there. The bad news is that the present distress in the financial space is likely to spread to other sectors soon.

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Interest-Rates

Monday, August 11, 2008

Could Lower Commodity Prices Pave the Way to Steady Interest Rates? / Interest-Rates / US Interest Rates

By: Money_Morning

Best Financial Markets Analysis ArticleWilliam Patalon III writes: With oil trading near a three-month low (and corn now at a four-month low), U.S. Federal Reserve policymakers may have just the ammunition they need to hold the line on interest rates for the foreseeable future - or at least until their Sept. 16 policymaking meeting.

On the other hand, threats of hurricanes in the Gulf of Mexico and geopolitical turmoil in Iraq, Turkey, Nigeria - and now the fireworks between Russia and Georgia - could spark a dramatic reversal in sentiment and renew fears of supply disruptions.

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Interest-Rates

Wednesday, August 06, 2008

Fed's Next US Interest Rate Move is Down / Interest-Rates / US Interest Rates

By: John_Browne

Yesterday, the Fed surprised no one and left its key rates unchanged and gave no indication that the committee was preparing to raise or lower rates anytime in the foreseeable future. As always, the market reactions were much more interesting and unpredictable. In this case, bond markets barely changed, the U.S. stock market jumped, and Euro futures strengthened slightly against the U.S. dollar.

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Interest-Rates

Tuesday, August 05, 2008

Talk of US Rate Hikes is Comical Says Pimco Chief Bill Gross / Interest-Rates / US Interest Rates

By: Mike_Shedlock

Yahoo!Finance is reporting Fed Can't Raise Rates .
The Federal Reserve's decision to hold the line on interest rates was the only move the central bank could make considering the state of the US economy, PIMCO chief Bill Gross said on CNBC.

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Economics

Tuesday, July 01, 2008

Its Inflation NOT Deflation, US Heading for Sharply Higher Interest Rates / Economics / US Interest Rates

By: David_Petch

Best Financial Markets Analysis ArticleIt is the end of the week and the start of a long weekend up here in the Great White North, so today's commentary will be brief. Oil climbed overnight to peak at $141.71/barrel and this is likely not set to slow down yet until something breaks. Continue to stock up on dry goods such as rice, whole-wheat flour, powdered milk, brown sugar etc. because prices are going much higher. Many of the countries around the globe with currencies pegged to the US dollar have been forced to depreciate them via interest rates and fiat expansion to keep at a preset level. This has caused prices to rise higher than anticipated and many such nations are being forced to raise interest rates.

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Politics

Sunday, June 29, 2008

The End of the Anglo-American Empire? / Politics / US Interest Rates

By: Richard_C_Cook

Much of the world's history over the last century has been dominated by the United States. But by the turn of the millennium in 2000-2001, the “American Century” had begun to descend into a chamber of horrors.

The years since then have been marked by the huge financial bubbles engineered by the U.S. Federal Reserve System and the virus of predatory global capitalism. We have the looming worldwide economic crisis with rising bankruptcies, credit disruptions, and soaring fuel and food prices. Alongside has been the thinly-disguised but continuing attempt by the U.S. to conquer the Middle East by force of arms under the heading of the “War on Terror.”

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Interest-Rates

Saturday, June 28, 2008

Fed Blows It! Wall Street and Dollar Pounded! / Interest-Rates / US Interest Rates

By: Money_and_Markets

Best Financial Markets Analysis ArticleMike Larson writes: Boy, did Federal Reserve Chairman Ben Bernanke blow it this week!

Investors were looking for a strong Fed statement because they believed it would support the dollar and snuff out the recent surge in commodities prices.

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Interest-Rates

Thursday, June 26, 2008

Markets Panic as Feds Bluff Called on US Interest Rates / Interest-Rates / US Interest Rates

By: Jim_Willie_CB

Best Financial Markets Analysis ArticleFor the last couple weeks, my attention has been given to the amusement and desperation behind propaganda, bluffs, and the utter desperation of the US Federal Reserve in the orchestrated rumors of a new position wherein they would soon or eventually raise the official interest rate in order to combat the horrendous price inflation brought about by the falling crippled US Dollar. What utter nonsense! To hear that the investment community actually accepted and embraced this notion was laughable on its face, and served as continued evidence that the loose collection of investors, speculators, and observers simply cannot wake up reality despite the events that began last August 2007 when the mortgage debacle ripped the banking system wide open with gaping wounds. The US Fed needs to arrest the falling US Dollar., no doubt. But it cannot.

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Interest-Rates

Thursday, June 26, 2008

FOMC Stays on Hold, Keeping Its Interest Rate Options Open / Interest-Rates / US Interest Rates

By: Paul_L_Kasriel

The Fed is less worried about a death spiral in real economic activity and more worried about upside risks on inflation than it was at the end of April. This does not mean that the economic downside risks and inflation upside risks are equal in the eyes of the FOMC. In my opinion, the Fed remains more worried about weaker economic activity than it is about a wage-price spiral. Recent data suggest that housing is nowhere near a bottom, capital spending remains weak and the labor markets continue to soften.

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Interest-Rates

Wednesday, June 25, 2008

Waiting for the Fed's US Interest Rate Decision and Statement / Interest-Rates / US Interest Rates

By: Jennifer_Yousfi

Best Financial Markets Analysis ArticleEconomists and investors wait with bated breath for the U.S. Federal Reserve to release the statement from the Federal Open Market Committee this afternoon (Wednesday) at 2:15 p.m. EDT.

While it is almost universally expected that the FOMC will vote to hold the Federal Funds rate steady at its current 2.0%, the language in the accompanying statement will be scrutinized for clues about the upcoming August and September meetings.

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Interest-Rates

Tuesday, June 24, 2008

Fed Futures Discounting Interest Rate Hikes and Dollar Support / Interest-Rates / US Interest Rates

By: Black_Swan

Best Financial Markets Analysis ArticleToday begins a heavily anticipated FOMC meeting. Yeah, we know all the meetings are hyped-up quite a bit, but this one’s a little different. That’s because the head hauncho, Ben Bernanke, has changed his tone.

Coming off a series of rate cuts that’s taken the Fed Funds rate from 5.25% all the way down to 2%, Bernanke is talking like he’s already prepared to start hiking his benchmark rate right back up. His comments over the last few weeks have been aimed most directly at inflation (rather than the potential for further economic weakness). He’s even made clear remarks about the consequences of a weak U.S. dollar.

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Interest-Rates

Monday, June 23, 2008

All Eyes on the Fed Signals on US Interest Rates and Inflation / Interest-Rates / US Interest Rates

By: William_Patalon_III

Best Financial Markets Analysis ArticleThe U.S. Federal Reserve will be in the spotlight again this week - and not because of those speaking engagements that seem to help whipsaw investor emotions. Tomorrow (Tuesday) and Wednesday, central bank Chairman Ben S. Bernanke will meet with his fellow policymakers on the interest-rate setting Federal Open Market Committee (FOMC).

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Interest-Rates

Thursday, June 19, 2008

Bernanke's Interest Rate Headache / Interest-Rates / US Interest Rates

By: Alex_Wallenwein

Best Financial Markets Analysis ArticleThe Euro vs Dollar Currency War is back on the front burner. For years, it used to be a cold war, but now it's hot again – and Bernie can't take the heat; it gives him headaches.

Poor Bernie.

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Interest-Rates

Tuesday, June 17, 2008

How to Drive Commodity Prices Even Higher / Interest-Rates / US Interest Rates

By: Tim_Iacono

Let's see, the last two rising asset classes didn't really transform into bubbles until the Fed started raising interest rates - I'm warming up to the idea of a higher Fed funds rate.

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Interest-Rates

Friday, June 13, 2008

ECB Calls Bernanke’s Bluff on Defending the US Dollar / Interest-Rates / US Interest Rates

By: Gary_Dorsch

Best Financial Markets Analysis ArticleA new member of the British Parliament once solicited the advice of Benjamin Disraeli, the nineteenth century British prime minister, on whether he should speak up on a controversial issue. “Do you have anything to say that has not already been said?” Disraeli asked him. “No,” the man conceded. “I just want the people whom I represent, and the members of Parliament to know that I participated in the debate.”

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Interest-Rates

Sunday, June 08, 2008

Signs of the End for Fed US Interest Rate Cuts Are Everywhere / Interest-Rates / US Interest Rates

By: Donald_W_Dony

Best Financial Markets Analysis ArticleWith inflationary pressures coming out of Pandora's box again, and largely fueled by soaring crude oil prices, is it any wonder that the Fed has stated in its last FOMC meeting in late April that this rate cut was "a close call" and that "any future rate deductions will be closely reviewed". The talk now, coming from Mr. Bernanke, is concern surrounding the low level of the U.S. dollar and inflation. So as the shift in direction has moved 180 degrees from providing stimulus to the financial markets and preventing a recession from taking root to inflation and currency protection. But were there signs of this new direction earlier in the market? From an intermarket perspective, there were plenty of clues by April.

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Interest-Rates

Wednesday, May 28, 2008

Surging Inflation Ensures US Interest Rates Headed Higher / Interest-Rates / US Interest Rates

By: Martin_Hutchinson

Best Financial Markets Analysis ArticleThe inflationary reality that we as consumers have been living for months may finally be starting to dawn on the U.S. Federal Reserve.

The minutes of the last policymaking Federal Open Market Committee (FOMC) meeting, released on Wednesday, showed that the Fed's inflation forecast was raised from a range of 2.1%-2.4% to a range of 3.1%-3.4%. 

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Economics

Monday, May 19, 2008

Inflation and Interest Rates at Forefront of this Weeks Economic Data / Economics / US Interest Rates

By: William_Patalon_III

Best Financial Markets Analysis ArticleYou can bet there will be a lot of discussion about interest rates this week, thanks to the release of the producer price index (PPI) report tomorrow (Tuesday) and the U.S. Federal Reserve meeting minutes on Wednesday.

The PPI report will undoubtedly rekindle the inflation-versus-recession debate (with more than a few comments about stagflation thrown in for good measure).

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Interest-Rates

Thursday, May 01, 2008

Financial Markets Second-Guessing the Fed / Interest-Rates / US Interest Rates

By: Adrian_Ash

Best Financial Markets Analysis Article"...'Buy the rumor, sell the news' applies to all markets. Not least when the Fed is committed to reflating housing and stocks..."

"EVEN THE CASUAL OBSERVER can have no doubt that FOMC decisions move asset prices, including equity prices," noted Ben Bernanke, now chairman of the Federal Reserve's Open Market Committee, in a speech of Oct. 2003.

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Interest-Rates

Tuesday, April 29, 2008

The Fed's Interest Rate Dilemma: Rescue the US Housing Market, or Feed the Poor? / Interest-Rates / US Interest Rates

By: Martin_Hutchinson

Best Financial Markets Analysis ArticleAt their two-day meeting that starts today (Tuesday), U.S. Federal Reserve policymakers will have to grapple with a moral choice that is well beyond the pay grade of central bankers - choosing between the financial stability of U.S. homeowners and world hunger.

That's not an exaggeration. Interest-rate policy normally only affects the world economy at the margin, but it has now been so expansionary for so long that the Fed's interest-rate strategy has turned into a moral dilemma of sorts. In short, the central bank's monetary policy will likely determine whether millions of U.S. homeowners lose their homes or millions of the world's poor starve.

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Interest-Rates

Monday, April 28, 2008

US Fed Expected to Cut Interest Rates to 2% on Wednesday / Interest-Rates / US Interest Rates

By: William_Patalon_III

Best Financial Markets Analysis ArticleU.S. Federal Reserve policymakers will likely cut its key interest rate to 2.0% from 2.25% this Wednesday, which would mark the seventh such move since the central bank launched its rate-reduction campaign in mid-September.

But if the central bank does pare short-term interest rates, it's likely to be the last such move in awhile; the Fed will take a break and give its rate cuts a chance to work their way through the U.S. economic system.

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Interest-Rates

Wednesday, April 23, 2008

Further US Interest Rate Cuts Will Do Far More Harm than Good / Interest-Rates / US Interest Rates

By: Mike_Whitney

Best Financial Markets Analysis ArticleLast week's stock market blowout added more than 4 percent to the Dow Jones Industrials, but it had no affect on Libor rates. Libor rose steadily from Tuesday through Friday signaling more troubles in the banking system. Libor, which means London Interbank-Offered Rate, is the rate that banks charge each other for loans. It has a dramatic effect on nearly area of investment. When the rate soars, as it did last week, it means that the banks are either too weak financially to lend to each other or too worried about the ability of the other bank to repay them. Either way, it puts a crimp in lending. Banks serve as the transmission point for credit to the broader economy via business and consumer loans. When they're bogged down by their own bad investments or when risks increase; rates go up and the whole process slows to a crawl. When banks are unable to extend credit freely, business activity decreases and GDP shrinks.

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Interest-Rates

Monday, April 21, 2008

US Interest Rates and Bond Yield Spread- The Full Nine Yards / Interest-Rates / US Interest Rates

By: Captain_Hook

Best Financial Markets Analysis ArticleThe joke this April Fool's Day was on the short sellers with yet another squeeze higher in stocks. Of course this has not been a problem since last summer as stocks have been (and remain) in a bear market. Unfortunately for short sellers this time around however, this bounce will likely be more robust than previous occurrences in that important cyclical influences have now gone positive, which will act as a tail wind for the bulls in fits and starts (choppy price action) right into the second quarter of next year. In this regard yesterday's violent rise was fuelled by hedge funds officially reversing the sell stocks / dollar and buy commodities / precious metals trade for the new quarter, implying they will endeavor to maintain these positions until June. And it just so happens this is when we are looking for a recovery high in stocks this year, sometime in and around mid-June in a possible double top test after an initial spike here in April, normally a seasonally strong month even in weak years. Of course May should provide some excitement to the downside however, which would bring gold / commodities back to life as the dollar ($) is sold once again.

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Interest-Rates

Thursday, April 10, 2008

UK Interest Rates to be Cut to 5% Today on Fears of Housing Recession / Interest-Rates / US Interest Rates

By: Nadeem_Walayat

Best Financial Markets Analysis ArticleThe Bank of England is expected to cut UK interest rates to 5% at today's MPC meeting following a slump in UK house prices that saw a 2.5% fall in March (Halifax:SA). Interest rates were last cut in February 08 which was inline with the Market Oracle forecast as of August 07 and Sept 07 for UK interest rates to fall to 5% by September 2008, this was revised lower to 4.75% in January 2008 , following the US Panic rate cut of 0.75% on 22nd Jan 08 to 3.5%, and subsequent cuts which has taken the US Fed Funds rate down to 2.25%.

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Interest-Rates

Tuesday, April 08, 2008

Did Greenspan Have to Cut the Fed Funds Interest Rate as Much? / Interest-Rates / US Interest Rates

By: Paul_L_Kasriel

Best Financial Markets Analysis ArticleIn today's Financial Times , Greenspan is generously given yet another chance to defend his legacy. Greenspan's argument that it was not his doing that set off the U.S. housing bubble reminds me of my two perfect children. When they appeared to err, it was never their fault. Greenspan's main defense lies on the fact that long-term interest rates were falling in the early 2000s due to global factors beyond his control. To start with, let's give him this one. But even if the decline in long rates were beyond his control, did he have to cut the fed funds rate - an interest rate he did control - as much as he did and hold it at the low level as long as he did (see Chart 1)?

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Interest-Rates

Tuesday, April 08, 2008

Lessons from Japan: Prepare for 0% US Interest Rates / Interest-Rates / US Interest Rates

By: Jim_Willie_CB

Best Financial Markets Analysis ArticleThe prospect of a US Fed 0% rate becoming a reality has been on my mind since August when the subprime made news hit. In my view, the entire mortgage bond structure would suffer massive losses in a successive of waves, beginning with subprimes, extending to primes, and concluding with commercials. How could housing distress not spread to nearby shopping malls, office complexes, and urban centers? First, USTreasurys would draw huge sums of money, reducing bond yields across the entire set of maturities. Second, the coincident event would be a painful recession. The US financial system would be unable this time to pull the US Economy out of the quicksand. Far too many vicious cycles would kick into gear, unleashing powerful feedback loops. We are seeing them in full glory now. Housing prices and foreclosures, bank write downs with sliding home collateral, US Dollar decline with a slower US Economy, household spending with rising costs, they are work to sustain more pain.

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Interest-Rates

Tuesday, April 01, 2008

Will Bernanke's Interest Rate Cuts Save the US Economy? / Interest-Rates / US Interest Rates

By: Gerard_Jackson

In the hope of averting a credit crunch and recession Bernanke recently slashed the federal funds rate by 0.75 per cent, bringing it down to 2.25 per cent. Did he do the right thing? Well, Larry Kudlow, NRO's economics editor , certainly thinks so. He eulogised that Bernanke's rate cuts "are vastly more effective than the so-called economic-stimulus rebate plan coming out of Congress and the White House.

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Interest-Rates

Tuesday, March 25, 2008

Precipitous Drop in Eurodollars is not Sustainable / Interest-Rates / US Interest Rates

By: John_Handbury

These days the markets are getting easier to read. For example, today long term Eurodollars got absolutely killed with Sep 2009 contracts down about 35 basis points. According to the experts this was due mainly to the bullish housing report, which showed that existing housing sales are up slightly from January.

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Interest-Rates

Wednesday, March 12, 2008

Are US Interest Rates Fated to Rise? / Interest-Rates / US Interest Rates

By: Greg_Silberman

Best Financial Markets Analysis ArticleThere is one path in investing that is sure to lead to ruin. It's a dangerous path because it lacks one critical ingredient for success – thought! The path we are speaking about is called “following the consensus”.

It is both intellectually and emotionally easy to follow a majority of bullish analysts. Unfortunately the ‘consensus' is seldom right and hardly ever leads to BIG profits.

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Economics

Monday, February 11, 2008

The Greatest Danger to the US Economy is the Fed / Economics / US Interest Rates

By: Gerard_Jackson

Best Financial Markets Analysis ArticleAs I have said a number of times, the real economic problem that confronts the world today -- and that includes the US -- is lousy economics. Bernanke has made it clear that he follows fallacious line that it is the role of central banks to manipulate interest rates. We now have Charles Plosser, Philadelphia Fed President, stating that Bernanke's "aggressive rate cuts" will put the US on a growth trend of about 2.7 per cent by 2009. However, he claims that "if something can tip us into recession, the housing market is the biggest risk".

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Stock-Markets

Thursday, January 31, 2008

US Fed 0.50% Rate Cut Fails to Boost a Fragile Stock Market / Stock-Markets / US Interest Rates

By: Donald_W_Dony

The aggressive 50bps Fed rate cut and the finishing negative numbers points to the deep fragility of the stock market. As the rate now sits at 3%, this leaves very little room for the Fed to cut any further. This is particularly concerning as the new bear market has potentially 18-30 months of additional downward pressure on the stock market and the economy.

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Stock-Markets

Monday, January 28, 2008

Fed Rate Cut Ignites a Short-lived Stock Market Relief Rally / Stock-Markets / US Interest Rates

By: Paul_J_Nolte

In this day and age of instant access/analysis and reactions, how can one person have such an effect upon the markets…and it is not the Fed Chief. Could it be that one trader, working for Societe General, create such a mess that the unwinding could push down all the markets around the world and force the Fed here to cut rates by 75 basis points (bp)? Given the relatively unchanged market from the prior week, maybe – however looking at the trading activity for the week, it is a difficult argument to make. As usual, the trading of the week, as well as the news answers fewer questions than it creates, but a few interesting nuggets may be gleaned from some of the very thin data.

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Interest-Rates

Saturday, January 26, 2008

Fed Following Short-term Money Market Interest Rates Towards US Recession / Interest-Rates / US Interest Rates

By: Anthony_Cherniawski

Best Financial Markets Analysis ArticleI have said multiple times in the past that the Federal Reserve doesn't lead with interest rate cuts. It follows. The proof is in the chart to the left, which compares the 3-month Treasury Bill Discount Rate to the Federal Funds Rate (blue) and the Fed Discount Rate (red). What this indicates is that there is more room to cut interest rates next week.

But this chart has a darker message , too. The flight to safety in short-term money market funds is a leading economic indicator of a recession.

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Interest-Rates

Thursday, January 24, 2008

UK Interest Rate 2008 Forecast Cuts to 4.75% by September 2008 / Interest-Rates / US Interest Rates

By: Nadeem_Walayat

Best Financial Markets Analysis ArticleThe US Fed's emergency 0.75% interest rate cut to 3.5% following the global stock market plunge on fears of a looming US recession now increases the probability of a near certain cut in UK interest rates at the February MPC Meeting, rather than at the originally forecast March MPC meeting. Whilst the US has made deep cuts in interest rates from a peak of 5.25% to 3.5%, the UK has only cut rates by 0.25% from a peak of 5.75% to 5.50% with the expected February cut to take rates to 5.25%.

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Interest-Rates

Friday, December 21, 2007

An Investors View of US Fed Interest Rates and Liquidity Moves / Interest-Rates / US Interest Rates

By: Hans_Wagner

Best Financial Markets Analysis ArticleReading the Fed's Tea Leaves

The Federal Reserve has indicated they want to be more transparent with the markets, believing that it will be better for all market participants. Before the Federal Open Market Committee (FOMC) meeting on December 11, 2007 several of the members of the Fed spoke before various groups seeking to explain their thoughts about the economy and interest rates. As a result many economists and investors felt the Fed would take the necessary steps to help the U.S. economy avoid a recession by lowering the Fed Funds rate 0.25% to 0.50% and lowering the discount rate at least 0.50% to help provide the liquidity many banks need. Then we learned they only lower the Fed Funds and Discount rate by 0.25%. The U.S. markets fell dramatically.

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Interest-Rates

Thursday, December 13, 2007

US Fed Term Auction Facilty to Drive Interbank Rates Lower / Interest-Rates / US Interest Rates

By: Paul_L_Kasriel

Best Financial Markets Analysis ArticleA lot of us were scratching our heads yesterday at 1:16 pm CST as to why the Fed did not reduce the spread between its discount rate and its federal funds rate target so as to alleviate pressures in the term Libor market that have developed since August (see Chart 1 below). Little did we know that the Fed had a little holiday stocking stuffer to give us today - Term Auction Facility.

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Economics

Sunday, December 09, 2007

Why US Interest Rate Cuts if GDP is Growing by 5%? / Economics / US Interest Rates

By: Andy_Sutton

Overall, the Federal Reserve must be given decent marks for keeping up appearances in the wake of the onset of the largest credit crisis in US history. For the situation is now ubiquitous, wreaking havoc in virtually every market. True to form, the Fed has continued to modify its statements, perceptions all in an attempt to manage the public's confidence in the fact that yes, they are still in control of the economy. There have been, however, an increasing number of discrepancies and important issues emerging over the past several weeks and some startling but expected developments.

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Economics

Monday, November 12, 2007

Interest Rates, Budget Surpluses and Other Economic Fallacies / Economics / US Interest Rates

By: Gerard_Jackson

One only has to read the financial pages of any newspaper to fully experience the poverty of economic thought that pervades the media. It is important to understand that what is considered by the media as sound economics is — bye and large — merely a reflection of the economic thinking that dominates the Treasury and the Reserve Bank. Terry McCrann — Herald Sun finance writer — is an excellent example of what I mean. I want to make it clear, however, that I am not picking on McCrann. I am only trying to clear the economic waters that the likes of McCrann have inadvertently muddied.

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Interest-Rates

Saturday, November 03, 2007

The US Fed, The Discount Interest Rate and Market Manipulation / Interest-Rates / US Interest Rates

By: Tim_Wood

Best Financial Markets Analysis ArticleIn the wake of the recent Fed meeting and the worldwide attention that it seems to gather these days, I want to address once again the Fed and the Discount rate, but I also want to address manipulation.

First of all, I want to readdress the fact that despite popular opinion, the Fed follows the lead of the short-term credit markets. My Trend Indicator on my Fed model turned down in June, before the first rate cut occurred.

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Interest-Rates

Wednesday, October 31, 2007

US Fed Interest Rate Cut as Housing Bust Continues to Slow Economy / Interest-Rates / US Interest Rates

By: Nadeem_Walayat

In line with market expectations the Fed cut US interest rates by 0.25% to 4.5% in an attempt to support the crumbling US housing market which continues to put a downward pressure on the US economy.

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Stock-Markets

Wednesday, October 31, 2007

Stock Market Reaction to US Fed Interest Rate Cut of 25 Basis Points / Stock-Markets / US Interest Rates

By: Mike_Paulenoff

For whatever it is worth, the "gurus" on CNBC seem to think that the Fed signaled a pause in its accommodation policy (all of two cuts and 75 bps) because of the statement that "the rate cut taken to forestall harm to the broader economy."

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Interest-Rates

Wednesday, October 31, 2007

What is the VIX Directional Tendencay Indicator Prior to US Interest Rate Annoucement and Market Risk Analysis / Interest-Rates / US Interest Rates

By: Marty_Chenard

Best Financial Markets Analysis ArticleIn this update, we will cover : 1.) What the VIX Directional Tendency Indicator is saying prior to Bernanke's announcement today.   2.) Part 2 of the Study on: What our Inverse Data Study is saying about market conditions and risk levels.

1.) The VIX (Volatility Index) is telling an interesting story as we wait for Bernanke's decision this afternoon.

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Interest-Rates

Tuesday, October 30, 2007

Are US Interest Rates Going to Fall on Wednesday? The Markets Certainly Thinks So / Interest-Rates / US Interest Rates

By: Donald_W_Dony

Best Financial Markets Analysis ArticleWhen the last Fed rate cut occurred, it set off a rapid chain reaction in all of the four markets; currencies, commodities, bonds and stocks. For example, the Canadian dollar jumped to par with the U.S. greenback, gold broke out of its 12-month consolidation, U.S. bonds reversed their three year slide and utilities started to climb again. Will the Fed cut the rates again at the next meeting on Wednesday? The markets are certainly suggesting that.

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Interest-Rates

Wednesday, October 24, 2007

Banking Stocks Breakdown Signals Next US Fed Interest Rate Cut / Interest-Rates / US Interest Rates

By: Jim_Willie_CB

Best Financial Markets Analysis ArticleIn late summer, my perceived strong signal for the September rate cut proved accurate. It was the dire condition of the Wall Street broker dealer stock index, the XBD. My contention all along has been that the official USFed rate cut was motivated by Wall Street giant banker interests, whereby the actual rescue stimulus was disguised and thoroughly devious. In reality it was a mammoth subsidy for Wall Street firms. They stood first in line at the Discount Window. No obvious recession was evident in the USEconomy, except for a housing retreat (better labeled a rout).

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Interest-Rates

Saturday, October 20, 2007

Asset Class Behavior Following Fed Interest Rate Cuts - Part 2 of 4 / Interest-Rates / US Interest Rates

By: Chris_Ciovacco

Best Financial Markets Analysis Article"The dollar has been sliding since the Fed last week cut interest rates by a larger-than-expected half percentage point. Since then, disappointing U.S. economic data have stoked expectations that another rate cut is on the way. Lower interest rates, used to jump-start an economy, can weaken a currency as investors transfer funds to countries where their deposits and fixed-income investments bring higher returns.As the dollar sinks, consumers find imported products— Australian wines, Japanese cars or Chinese toys — are more expensive. "- Associated Press -09/28/2007

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Interest-Rates

Tuesday, October 02, 2007

US Interest Rates Headed For 3.75% Over the Next 12 months / Interest-Rates / US Interest Rates

By: John_Mauldin

Best Financial Markets Analysis ArticleWe are in a world far different than the one I learned about in economic text books. As I have written, the shadow banking system of hedge funds and CDOs, CLOs, PIPES, etc. have created a new financing economic reality far different than the traditional banking system was just 20 years ago. Does the Fed have the tools in its toolkit to deal with the new reality?

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Interest-Rates

Monday, October 01, 2007

NOLTE NOTES Was the Fed Too Hasty to Cut Interest Rates ? / Interest-Rates / US Interest Rates

By: Paul_J_Nolte

What a quarter – from the heights to the depths and back again, the quarter ended with the SP500 up a modest 1.5%, barely above the rate earned on bonds with a lot less gray hairs. Yields fell during the quarter, with short rates falling a full percentage point, while long-term bonds dropped a quarter percent. The news last quarter has been splashed all over the media – from liquidity crisis to real estate blues to just maybe a recession. But the money management business is never about what was done yesterday – what are y'all doing for me lately?

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Interest-Rates

Monday, October 01, 2007

Why the Fed's US Interest Rates Policy Will Fail / Interest-Rates / US Interest Rates

By: Gerard_Jackson

Best Financial Markets Analysis ArticleIt was only it was last August that I told readers not to be surprised if the fed cuts the funds rate. (US financial markets rocked — what is really happening ). Lo and behold, on September 18 the fed cut by 50 bps, reducing the funds rate to 4.75 per cent. The cut immediately ignited share prices, with the Dow Jones industrial average surging by 335 points. The only surprising thing is that anyone was actually surprised. That the first effect of a credit expansion is usually felt on the stock market seems to have eluded the commentariat 1 .

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Interest-Rates

Tuesday, September 25, 2007

The Federal Reserve's Interest Rate Cut Does Not Help Americans / Interest-Rates / US Interest Rates

By: Axel_Merk

In our assessment, the Federal Reserve's (Fed's) interest rate cut was wrong. Forget about the “moral hazard” of whether the cut would plant the seeds for further bubbles. Lowering interest rates is wrong because it will do few any good, but cause many a lot of harm.

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Stock-Markets

Tuesday, September 25, 2007

Stock Market Returns After Interest Rate Cuts / Stock-Markets / US Interest Rates

By: Hans_Wagner

Best Financial Markets Analysis ArticleOn September 18, 2007 the U.S. Federal Reserve lowered the Federal Funds rate and the Discount rate by 0.50% and the stock market leapt up by 2.9% for the day. Many investors were surprised by the Fed's move and wished they had been fully invested in the market. So, will the market continue up as a result of the move by the Fed? It turns out that there are a couple of studies that we might use to give us some guidance.

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Stock-Markets

Friday, September 21, 2007

Fed Panics! - Era of Global Financial Market Instability / Stock-Markets / US Interest Rates

By: Mike_Whitney

Best Financial Markets Analysis ArticleWall Street loves cheap money. That's why traders were celebrating on Tuesday when Fed chief Ben Bernanke announced that he'd drop interest rates from 5.25% to 4.75%. The stock market immediately zoomed upward adding 336 points before the bell rang. The next day the giddiness continued. By mid-morning the Dow was up another 110 points and headed for the stratosphere.  Everyone on Wall Street loves Bernanke. He brings them candy and sweets and lets the American worker pay the bill.

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Interest-Rates

Wednesday, September 19, 2007

Fed's Half-point Cut Sign of Desperation! Next ... / Interest-Rates / US Interest Rates

By: Money_and_Markets

Martin Weiss writes: Yesterday, in our Monday issue of Money and Markets , we told you about the massive and unanimous pressures on Fed Chairman Ben Bernanke to cut interest rates by a half point — the desperate demands of home builders, the panicky screams from mortgage lenders and the wailing cries from Wall Street.

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Interest-Rates

Tuesday, September 18, 2007

Fed Cuts US Interest Rates to 4.75%, Dollar plunges, Stocks Soar / Interest-Rates / US Interest Rates

By: Sarah_Jones

The US interest rates were cut by 0.5% to 4.75%. The market was already pricing in expectations for 0.25%.

US Stocks rallied strongly on the news with Dow Jones Index rallying more than 300 points on the news to above 13,700 into the last hour of trading.

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Interest-Rates

Monday, September 17, 2007

Net Commericials and the FOMC Interest Rate Meeting / Interest-Rates / US Interest Rates

By: James_West

Everybody is anticipating next week's FOMC decision on federal funds target rate, due this Tuesday, Sept. 18. As of last Friday, according to the 30-day Federal Funds futures, there is a 42% probability of a 25-basis point rate decrease versus a 58% probability of a 50-basis point rate decrease. In other words, a rate-cut is priced into the market already. The only question is: will the Fed cut by 25-basis points or 50-basis points. From the Funds futures, we are leaning towards a 50-basis point cut, but only slightly.

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Interest-Rates

Monday, September 17, 2007

Bernanke's No-Win Interest Rate Decision / Interest-Rates / US Interest Rates

By: Money_and_Markets

Best Financial Markets Analysis ArticleMartin Weiss and Mike Larson write: We feel sorry for Ben Bernanke. He didn't create the sputtering, explosion-prone tanker truck he's trying to maneuver.

Nor did he get any training on how to shift gears.

But he's certainly getting plenty of not-so-subtle prods and catcalls from a diverse group of back-seat drivers.

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Interest-Rates

Monday, September 17, 2007

Bernanke and US Interest Rates - Between A Rock And A Hard Place / Interest-Rates / US Interest Rates

By: Captain_Hook

Best Financial Markets Analysis ArticleBernanke is an academic, and he acts like one, relying on the safety of flawed models all too often. And all too often, it could be argued this is keeping him behind the curve in terms of official measures, looking at backward indicators in setting future policy. Greenspan on the other hand operated more like he came from the school of hard knocks (like a streetwise gangster), where some (neocon types) would argued he had a real feel for what need be done, and was customarily ahead of the curve in official policy measures, or backroom deals for that matter, whatever would get the job done.

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Interest-Rates

Saturday, September 15, 2007

Tightening Money - US Interest Rate Cut Not a Done Deal / Interest-Rates / US Interest Rates

By: Brian_Bloom

Its one thing for the Central Bank to “liquefy” the commercial banks, it's another for the commercial banks to on-lend their cash.

Right now, the commercial banks are so nervous about what is unknown regarding the depth of the sub-prime mortgage debacle that they are not even lending to each other. That's why the Libor rate (London Interbank Offer Rate) has spiked.

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Interest-Rates

Tuesday, September 11, 2007

Would You Rather Have a Interest Rate Cut or a Strong Economy? / Interest-Rates / US Interest Rates

By: Hans_Wagner

Many investors seeking to beat the market are expecting a Federal Funds rate cut on September 18, 2007 as the Fed Funds Futures market is predicting at least a 25 basis point decrease. Also, it is likely that the rate cut has already been factored into the stock market. Recently, instead of focusing on the strength of the economy and the level of inflation, investors have become so enthralled with a rate cut that they are acting irrationally. When there is good economic news the market goes down. On the other hand the market goes up when the news is considered bad for the economy.

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Interest-Rates

Monday, September 10, 2007

Fed Expected to Cut Interest Rates As US Recession Looms / Interest-Rates / US Interest Rates

By: John_Mauldin

Best Financial Markets Analysis ArticleThis week in Outside the Box, good friend Paul McCulley of PIMCO fame addresses the important topic of fed fund easing. Paul addresses the predicament the current Fed finds itself in on account of not wanting to bail out those who took excessive risk in what he dubs the "shadow banking system," - comprising an alphabet soup of levered non-bank investment conduits, vehicles, and structures. The crux of the matter as Paul highlights is that the 50bp discount rate reduction still remains a penalty to the Fed Funds rate, hence simply not an attractive source of funding for real banks, who have access to the Fed funds rate.

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Interest-Rates

Monday, September 10, 2007

Fed September Meeting is Bernanke's Test / Interest-Rates / US Interest Rates

By: David_Urban

The September Federal Reserve meeting becomes a major test for Bernanke's reign as chairman. Wall Street responded positively to the discount rate cut but now the addict that we described earlier will be looking for its next fix. It wants it drug and that drug is liquidity. Since the cut, central banks worldwide have injected more than $300 billion dollars of liquidity into their banking systems through repurchase agreements and other arrangements. This tells me that the problems are not over. They have only moved the liquidity crisis to the backburner hoping, like in March, it corrects itself.

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Interest-Rates

Sunday, September 09, 2007

Housing Market Impact on the US Economy, Should the Fed Cut Interest Rates? / Interest-Rates / US Interest Rates

By: John_Mauldin

In this issue:
Best Financial Markets Analysis ArticleThe Shocker in the Employment Numbers
Should the Federal Reserve Cut Interest Rates?
Will A Cut Make Any Difference?
How Housing Woes Hurt the Rest of the Economy
Home Again, Home Again

The unemployment numbers came in today, and if you look under the hood of the data, it is worse than the headline loss of 4,000 jobs. Should the Fed cut the interest rates in two weeks? Will it make a difference? Are we headed into recession (as predicted here in my January 2007 forecast issue)? When do we see a bottom in the housing market? Are we there yet? We look at all this and more. It should make for an interesting letter, if I can get my jet-lagged body to cooperate.

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Interest-Rates

Saturday, September 08, 2007

Will the Fed Continue to Cut US Interest Rates? / Interest-Rates / US Interest Rates

By: Tim_Wood

Best Financial Markets Analysis ArticleIt seems like the hot debate on the upcoming Fed meeting is whether or not they will cut the discount rate. Given that we had a cut in August, I'm not sure if we will see another cut in September. But, I can tell you that at present the charts do in fact say that we have entered into an environment in which rates will continue to be cut over the longer-term. Here's why.

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Interest-Rates

Wednesday, September 05, 2007

Fed Wants Mortgage Lenders to Ease Terms and Delay Foreclosures / Interest-Rates / US Interest Rates

By: Adrian_Ash

Hit to the Head with a Two-by-Four

"...The Fed wants mortgage lenders to ease their terms and delay foreclosures. Yet it's just capped new lending at six state-chartered banks, hoping to restore their 'financial soundness'..."

BUSY DOING NOTHING about asset-price bubbles until after they burst, the Federal Reserve has still been chiding no end of miscreant banks, foreign firms, lenders and brokerages about fraud and money-laundering since the Dot Com Bubble burst.

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Interest-Rates

Friday, August 31, 2007

Gold Prices & Leasing Rates Jump as Bush Moves to Rescue Sub-Prime Housing / Interest-Rates / US Interest Rates

By: Adrian_Ash

Treasury Bond Holders Face Surge in Supply

SPOT GOLD PRICES rose strongly throughout the Asian and early London sessions on Friday, gaining nearly $5 per ounce to reach a new high for the week, as President Bush announced a rescue package for subprime US home buyers.

Effectively offering to nationalize the mortgage market for low- and no-income borrowers, Bush's bail-out plan is likely to force a steep increase in US bond issuance. The "safe haven" of choice for large investment institutions during the turmoil in this month's credit markets, Treasury bonds now risk serious, long-term inflation.

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Interest-Rates

Friday, August 24, 2007

US Fed - Write Some Checks! Bail 'Em Out! / Interest-Rates / US Interest Rates

By: Adrian_Ash

"There are more tears shed over answered prayers than over unanswered prayers..." - Teresa of Ávila, patron saint of headache sufferers

BE CAREFUL what you wish for. The entire US Treasury market is betting the Fed will cut rates in September. Goldman Sachs expects rates to finish the year at 4.5%, fully 75-points lower from here.

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Interest-Rates

Thursday, August 23, 2007

Desperate Measures For US Fed As Treasury Yields Scream for a Interest Rate Cut / Interest-Rates / US Interest Rates

By: Jim_Willie_CB

Best Financial Markets Analysis ArticleThe US financial system is experiencing a combination of a heart attack (fibrillation from absent trade recycled surpluses), a massive hairball (subprime debt securities) working through the bank arteries, and a realization (like Wiley Coyote in cartoons) that no terra firma lies beneath the economic feet as the depths below are vividly apparent. Massive money printing constitutes a heart attack, now a crescendo since the Constitutional violation on gold backed currency. The mortgage bonds simply cannot work through the banking system, with hairballs leading to constipation and unspeakable intra-bank distrust. For ten years the USEconomy has relied upon rising stocks or rising home properties to sustain an entire economy, from a structural foundation of inflating assets. For any central bankers or leading economists working as policy maker counselors, this is a purely heretical strategy.

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Interest-Rates

Wednesday, August 22, 2007

Fed President Lacker Resists Talk of Fed Funds Rate Cut as US Economy Flirts With Recession / Interest-Rates / US Interest Rates

By: Paul_L_Kasriel

Richmond Fed President Lacker is the first Fed official to speak publicly about the recent discount rate cut, liquidity issues and the prospects for FOMC federal funds rate policy. I would assume that his comments were cleared by Fed Chairman Bernanke before being delivered to us. Lacker could have saved his breath about discount policy and liquidity challenges. What enquiring minds really want to know is whether the FOMC intends to cut its federal funds rate target at or before its September 18 meeting.

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Interest-Rates

Tuesday, August 21, 2007

Black Monday for Bond Yields / Interest-Rates / US Interest Rates

By: Adrian_Ash

"...Monday this week marked the biggest move in Treasury bond yields since Black Monday in Oct. 1987 destroyed more than one-fifth of the US stock market's value..."

REMEMBER HOW INFLATION was the investment world's biggest single worry back in...oh...back in June?

Anyone snapping up 10-year US Treasury bonds back then is now looking clever. Very. Ten weeks ago, the 10-year yield touched a half-decade high of 5.32%. On Monday night in New York it closed below 4.65%.

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Interest-Rates

Tuesday, August 21, 2007

Why The Fed's Interest Rate Cut Did Not Come As A Surprise / Interest-Rates / US Interest Rates

By: John_Mauldin

Best Financial Markets Analysis ArticleThis week's Outside the Box is from good friend and South African partner Dr. Prieur du Plessis of Plexus Asset Management. Prieur suggests that we should not be surprised at last week's rate cut, as it is consistent with past rate cut cycles when viewed from the fact that banks are tightening up on their lending standards to both consumer and commercial borrowers. There are a number of very original graphs here with some very interesting analysis that is truly Outside the Box.

John Mauldin, Editor

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Interest-Rates

Monday, August 20, 2007

Lower US Interest Rates from the Fed are Not Likely / Interest-Rates / US Interest Rates

By: Hans_Wagner

Best Financial Markets Analysis ArticleEveryone seeking to beat the market from James Cramer to Wall Street big wigs are crying out for the U.S. Federal Reserve to lower the Fed Funds rate, the rate banks can borrow from each other. They believe that it will save the markets and help the firms recover from the mis-pricing of so many mortgage loans. However the Fed is not likely to lower rates in the near terms since inflation still looms on the horizon. After all fighting inflation is one of the primary missions of the Fed.

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Interest-Rates

Sunday, August 19, 2007

Prime Interest Rates and the Market Value of Gold / Interest-Rates / US Interest Rates

By: Greg_Silberman

Before the Feds Emergency rate cut on Friday the bias was to higher rates across the board. For example the Australian Reserve Bank increased prime interest rates by 0.25% and even now after the stock market pummeling, continues to warn of more to come. This article explains why interest rates are about to go higher at exactly the WORST possible time.

The question foremost on investors minds is whether a turbulent stock market warrants halting interest rate increases or, in the case of the US, decreasing rates to resuscitate the Real Estate and credit markets.

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Interest-Rates

Friday, August 17, 2007

US Interest Rate Cut - Relief is Spelt B-E-N / Interest-Rates / US Interest Rates

By: Brady_Willett

Yen carry is blowing up, global stock prices are in mini-crash mode, and the financial meltdown is threatening to spark an economic meltdown. Having gingerly danced with rhetoric and liquidity injections in recent days, the Fed started to boogie this morning. Here is the statement in its entirety:

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Interest-Rates

Thursday, August 16, 2007

Effective Fed Funds Rate Cut to 4.75% - Well, bless Poole's Beautiful Hide! / Interest-Rates / US Interest Rates

By: Adrian_Ash

ONLY A "CALAMITY" would justify an interest-rate cut now, says St. Louis Federal Reserve chief William Poole.

In which case, he either liquidated his personal stock investments before June...or the guy's got some real hide.

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Interest-Rates

Wednesday, August 15, 2007

Ben, If You're Going to Cut US Interest Rates... / Interest-Rates / US Interest Rates

By: Tim_Iacono

Federal Reserve Chairman Ben Bernanke pays pretty close attention to the inflation statistics, so he's probably already figured out that if he's going to cut short-term rates this year, he ought to do it in the next two months.

Just in case he hasn't figured it out already, maybe this explanation will assist in what will likely be a difficult decision-making process.

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Interest-Rates

Monday, July 30, 2007

Yield on US 10-Year Note Going Lower / Interest-Rates / US Interest Rates

By: Mike_Paulenoff

The yield of the 10-Year Treasury note climbed from 4.73% in March to 5.32% in June, at which point it had surged to a six-year resistance line, implying the potential for much higher rates. It then reversed in a big way and plunged to 4.74% into today's low, mostly in response to flight-to-safety concerns.

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Interest-Rates

Thursday, June 21, 2007

Bond Convexity From Mortgages Means Higher Interest Rates / Interest-Rates / US Interest Rates

By: Jim_Willie_CB

The cancer that is mortgage bonds does not linger in isolation. Everything in the bond world is connected to almost everything in the bond world, at least within the US sphere of speculative madness. The financial credit market is a confusing jumble of speculation, risk reducing hedges, and leveraged insanity found mainly in the hedge fund arena. Mortgages are causing problems from their bond hedge schemes, both on the loan portfolio side and the bond security side. Always one should consider both, and never are they inseparable. The only separable aspect is who the loser is nowadays.

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Economics

Monday, June 18, 2007

Are Most Economists Naive? / Economics / US Interest Rates

By: Tim_Iacono

The conclusion that most economists are naive, sometimes dangerously so, is something that has been hinted around at here for years, but now that the Wall Street Journal seems to concur, maybe it's time to stop asking the question and just say it.

Most economists are naive.

Or, maybe they're just too optimistic. Actually, in many cases, the two adjectives describe the same phenomenon - the willingness to suspend belief that something bad is likely to happen (or is already happening) due to a lack of real-world experience.

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Interest-Rates

Thursday, June 14, 2007

US Interest Rates and Inflation - Until is Now: How Fear becomes Risk / Interest-Rates / US Interest Rates

By: Paul_Petillo

How high can the markets go I asked last week, running the risk that as soon as a signed that article, it was almost guaranteeing that the markets would fall. How precipitously was unknown. The risk that everyone knew was built into the markets months ago became fear seemingly overnight.

The bond markets, acting as the canary in the coal mine have begun to choke on its own ambivalence. Regarded as the barometer of economic strength and weakness, fixed income has remained somewhat benign as the Dow set records almost daily.

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Interest-Rates

Saturday, June 09, 2007

US Interest Rate Spike and What to Do About It / Interest-Rates / US Interest Rates

By: Roger_Conrad

The 10-year Treasury note yield is again more than 5 percent. And while the benchmark is off its high for the day—it reached 5.24 percent at one point—the fallout has at last reached the rest of the income investment universe.

The Dow Jones Utility Average is now down about 9.1 percent from the all-time high of about 537 that it set in late May. The typical US real estate investment trust (REIT) is down 13.5 percent, and many bond funds are showing similar carnage, particularly those with the highest duration—i.e., leverage to interest rates.

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Interest-Rates

Friday, June 08, 2007

US Interest Rates Conundrum Unwind or Glut Rewind? / Interest-Rates / US Interest Rates

By: Brady_Willett

The U.S. economy slowed to a crawl in 1Q07 and the U.S. housing market is, by many accounts, years away from a meaningful rebound. With this in mind, why are long-term U.S. interest rates spiking higher and why have mortgage rates risen in each of the last four weeks to rest at 10-month highs?

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Interest-Rates

Tuesday, June 05, 2007

US T-Bond Yield Hits Resistance, A potential problem for the Fed? / Interest-Rates / US Interest Rates

By: Marty_Chenard

In case nobody is watching, the 30 Year Bond Yield is about to test its 8 year resistance for the second time. This is something to keep a close eye on, because 30 year yields and mortgage rates go hand in hand. See the long term chart below.

The concern is that home building is in a slump and many are speculating that we might be at a bottom ... ready to turn around. If the 30 year yield jumps up, then that would effect how large a home someone could afford, and it would mean that home sellers would get less for their homes in the longer term ... and fewer homes would sell.

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Currencies

Tuesday, May 22, 2007

The Decoy of the Falling US Dollar Revisited / Currencies / US Interest Rates

By: Professor_Emeritus

I have received the following letter from a reader of my column:

Mr. Fekete:

I have been reading your work for a number of years and always look forward to your thoughts, particularly when they run counter to conventional wisdom. In your latest piece you suggest that the falling dollar (or rising yen) actually strengthens the yen carry trade. My chartwork argues otherwise, and your logic escapes me. I would welcome clarification of one particular paragraph of yours, especially on the last sentence that, I believe, is central to your analysis. You wrote:

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Interest-Rates

Friday, May 11, 2007

FOMC - The Prospects for the US Interest Rates and the Dollar / Interest-Rates / US Interest Rates

By: Julian_DW_Phillips

The Fed's Open Market Committee yesterday repeated its assessment from March 21st that persistent inflation remains the predominant policy concern. Interest rates were held at 5.25%. The Fed has just said, "inflation is a predominant risk" but did not raise interest rates, and indicated that it is not likely to do so, as it pointed to lower growth and the ongoing housing price problems.

The impression given is that it will react to higher inflation but will not pre-empt it. The dangers of inflation with falling growth [stagflation] are now apparent. This is gold positive and $ negative as the Trade deficit will continue at excessive levels in a climate that could discourage the investment of surplus $ [Asian nations in particular] back into the States.

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Interest-Rates

Monday, April 30, 2007

The Bernanke Bluff on US Interest Rates / Interest-Rates / US Interest Rates

By: Paul_Petillo

Ben Bernanke, the Federal Reserve chairman seems to be holding his ground when it comes to short-term interest rates – at least in the short-term. His recent testimony before the Congressional Joint Economic Committee offered no additional insight into how the chairman thinks. His testimony before legislators offered no hint as to what he would do with rates in light of some troubling economic news.

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Interest-Rates

Thursday, April 05, 2007

A Fixed Interest Income Bond Market Shock Looms / Interest-Rates / US Interest Rates

By: Michael_Pento

First it was the NASDAQ stocks in 2000, then real estate prices, and now the third leg of this asset price correction is at the threshold. Recent salvos from China and our own commerce secretary may be the catalysts for this correction.

We have been in a multi-decade bull market in bond prices. From September of 1981 to June of 2003 the yield on the two year Treasury note fell from 16.46% to 1.23%. Likewise from October '81 through June '05 the 30 year bond has declined from 14.68% to 4.29%. Since then, the two and thirty year yield has risen to 4.5% and 4.85% respectively. According to Bloomberg, treasuries are now 1.56 percentage points lower than the 6.21% average of the past 20 years. That means even if you discard the high rates of a quarter century earlier into your calculation, treasuries yields are still about 32% below average!

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Interest-Rates

Monday, April 02, 2007

Nolte Notes - What if ? Trade War with China ?, War with Iran ? Still expect lower US interest rates / Interest-Rates / US Interest Rates

By: Paul_J_Nolte

Former Speaker of the House, Tip O'Neil said that all politics is local. However, today the focus is trained upon everywhere but within our boarders. The hostage “situation” in Iran, the rumblings of protection legislation directed at China as well as the ongoing debate about the war in Iraq. What we need is a good debate about a new stop light in the middle of town! The impact upon the financial markets has been to take their eyes off the economy and play many “what-if” games – what if the hostage crisis lingers in Iran, what will be the impact upon our oil supply.

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Interest-Rates

Thursday, March 29, 2007

Cross Currents For US TBonds and Interest Rates / Interest-Rates / US Interest Rates

By: Jim_Willie_CB

Volatility for US Treasury Bonds has risen markedly in the last several months. A rise in such bond yields creates a favorable background for gold prices. A fall in such bond yields leads to strong competition for gold as safe haven, in a manner which actually supports the USDollar.

Gold takes great advantage of rising bond yields. Cross currents point to both higher yields and lower yields, thus more volatility. Uncertainty abounds.

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Interest-Rates

Thursday, March 22, 2007

Fed Signalling US Interest Rate Cuts that may Not happen / Interest-Rates / US Interest Rates

By: Peter_Schiff

Don't Uncork the Champaign Just Yet - By omitting a few key words from their most recent statement, the Fed led Wall Street to the premature conclusion that the next move in interest rates will be down. With the economy clearly headed for recession, there is no doubt that the Fed would like nothing more than to do just that. However, given that it wants to pretend otherwise, and considering the damage it would do to the already shaky U.S. dollar, an actually rate cut seems highly suspect.

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Interest-Rates

Friday, March 09, 2007

Fed Signaling Future US Interest Rate Cuts - Gold to benefit / Interest-Rates / US Interest Rates

By: Jim_Willie_CB

In a series of public messages, the US Federal Reserve has issued some statements recently which telegraph an increasingly likely official interest rate cut. These guys will cut rates, but only when kicking and screaming, since they have displayed extreme reluctance at every opportunity.

They know the damage to the US Dollar certain to follow. They speak through their usual mouthpieces, but this time with the added impact of Sir Alan Greenspan, serial bubble engineer extraordinaire. One must connect the dots, a task now routine among my methods, putting to practice the motto “think like a thief” in order to properly gauge the enemy. Why? Because the integrity of the US financial system, economic management, and leadership is as low as a snake's belly slithering in the grass.

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Interest-Rates

Wednesday, September 20, 2006

Federal Reserve holds interest rates / Interest-Rates / US Interest Rates

By: Sarah_Jones

The U.S. Federal Reserve on Wednesday held its benchmark interest rate steady for a second straight meeting, saying that while inflation risks remain, they should abate as economic growth slows. The Federal Open Market Committee's decision to hold the overnight federal funds rate target at 5.25 percent -- the level hit in June after 17 straight increases -- was widely expected. But it was not unanimous. Read full article... Read full article...