Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
Sunday, June 08, 2014
ECB Negative Interest Rate Is A Dud, Bank Deposits Are Long Gone / Interest-Rates / ECB Interest Rates
By: Raul_I_Meijer
Much ado about nothing. That about sums up the real story behind the heated headlines on the “historic” decision by the ECB to lower its deposit rate into negative territory, from 0% to -0.1%. Because without any actual deposits, the move is empty, meaningless, showmanship, sleight of hand. There was a time when it made sense for banks to park reserves at the central bank, but that time is long gone, since banks don’t have to be afraid of each other’s hidden debts anymore. Not because those debts have disappeared , but because governments and central banks are now on the hook for them.
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Friday, June 06, 2014
ECB Pulls Out Pea Shooter, Fires, Misses Target / Interest-Rates / ECB Interest Rates
By: Mike_Shedlock
In a widely expected move this morning, ECB president Mario Draghi announced negative interest rates, the first-ever move for a major central bank.
The deposit rate in Europe is now negative 0.10%. The ECB also lowered the benchmark rate from 0.25% to 0.15%.
In a display of puffery, Draghi announced “we aren’t finished here”.
Friday, June 06, 2014
Euro-zone Negative Interest Rates, Ready to Pay the Bank to Hold Your Money? / Interest-Rates / ECB Interest Rates
By: Chris_Vermeulen
The six members of the European Central Bank (ECB) Executive Board and the 16 governors of the euro area central banks vote on where to set the rate. We watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.
Friday, June 06, 2014
The Great QE Bubble Lives On / Interest-Rates / Quantitative Easing
By: Raul_I_Meijer
This is one of those days where I wonder what I’m going to say about this one. It’s all too convoluted six ways to Sunday. Yeah, Mario Draghi delivered for markets and investors, and stocks rise a bit more. Like they’re not high enough yet, setting records in . One thing he didn’t do is commit to asset backed securities purchases, and so that is now what markets will be demanding from him next time around. Who cares anymore that ABS were the main conduit to blew up the same markets in 2008? Investors are happy, and Jack and Jill are ignorant. The Great QE Bubble lives to see another day. Yay!
Friday, June 06, 2014
Currency Wars - When Interest Rates Go Negative / Interest-Rates / ECB Interest Rates
By: John_Rubino
Yesterday morning the European Central Bank tried something different. As Bloomberg reported:
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Friday, June 06, 2014
ECB Cuts Base Interest Rate. So What? / Interest-Rates / ECB Interest Rates
By: Jonathan_Davis
I won’t bore you with the minutiae just a couple of details:
The ECB has cut the Base Rate by the staggering amount of, er, 0.1% to 0.15%.
Also, banks depositing funds at their Central Bank (the ECB) will be charged 0.1% for the privilege.
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Wednesday, June 04, 2014
When Fed Money Printing Runs Wild / Interest-Rates / Quantitative Easing
By: Clif_Droke
Since the advent of the quantitative easing (QE), the Fed’s unprecedented attempt at reversing the impact of the credit crisis, many long-held beliefs and assumptions have been demolished. One of the most sacred assumptions on the part of investors and economists alike is that central bank money printing always eventually leads to inflation. Yet six years have passed since the Fed first embarked on its historic attempt at reversing the effects of the credit crash and alas, no signs of inflation are on the horizon. Read full article... Read full article...
Wednesday, June 04, 2014
ECB Euro-zone Stimulus / Interest-Rates / Euro-Zone
By: Raul_I_Meijer
Everyone expects Mario Draghi’s ECB to announce stimulus measures on Thursday. If the forward guidance, if we can call it that, which was ‘leaked’ by Draghi and his minions is accurate, we’ll see the bank’s main refinancing rate lowered, and the deposit rate perhaps even turned negative, with a less obvious set of measures that may include asset purchases also in the offing. The main goal must be to drive down the euro, which is still way too expensive from the point of view of exports and which therefore holds back ‘recovery’ in the eyes of policy makers, pundits and economists. But it would have to be driving down the euro without driving down stock markets at the same time.
Tuesday, June 03, 2014
Why U.S. Treasury Bond Yields are at Record Lows / Interest-Rates / US Bonds
By: Michael_Pento
It seems that nearly everyone is confounded by the record low bond yields that are prevalent across the globe today. If investors can correctly pinpoint the real reason behind these low sovereign debt yields, they will also be able to find a great parking place for their investment capital to weather the upcoming storm.
Tuesday, June 03, 2014
Where $1 of QE Money Printing Goes: The Untold Story / Interest-Rates / Quantitative Easing
By: F_F_Wiley
“We don’t understand fully how large-scale asset purchase programs work to ease financial market conditions.” - New York Fed President Bill Dudley
“I don’t think there’s any doubt that quantitative easing enabled the rich and the quick. It was a massive gift… It was deliberate in the sense that we were hoping to create the wealth effect… I hope that we do indeed succeed in being able to say in the end the wealth effect was more evenly distributed. I doubt it.” - Dallas Fed President Richard Fisher
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Monday, June 02, 2014
30 Year US T-Bonds Headed For New Highs / Interest-Rates / US Bonds
By: Austin_Galt
In recent months I’ve heard a lot of chatter about how interest rates are now on the up. Heads are nodded in approval with comments along the lines of rates couldn’t really go any lower. Well count me out of that love-fest. After looking at the yearly chart of 30 Year US Treasury Bonds I have to say I can’t disagree enough. Let’s see why.
Friday, May 30, 2014
The Party Is Over In The U.S. Treasury Bond Market / Interest-Rates / US Bonds
By: EconMatters
Last Hurrah
Everybody knew the GDP number was going to be revised down on this reading, and that it probably gets revised up for the next reading, and Bond Traders used the Revision in first quarter GDP to take the 10-Year Yield down to 2.4% on a nice push, but this required a whole lot of ammunition, and as soon as Europe started to close at 10 am central time (Europe close is 10:30 am for practical purposes) the Traders needed to start closing some of these positions.
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Thursday, May 29, 2014
BRICS Gold Source & Belgium U.S. Treasury Bonds Bulge / Interest-Rates / US Bonds
By: Jim_Willie_CB
The detection of the rapid rise in USTreasury Bonds in the Belgium official central bank account has aroused broad and deep suspicions. Finally an open sore is visible that cannot be explained away easily. It first appeared a couple months ago. The initial knee-jerk reaction was that the USFed was colluding with the Euro Central Bank to hide heavy bond monetized purchases in New York, in effect demonstrating the Jackass point that the QE volume was huge, that the Bernanke and Yellen Fed were astute liars using deception. Next the evidence pointed to Russia having embarked on a significant dump of USTBonds using the proxy of EuroClear. It all made so much sense, the Russian account having declined in roughly the same volume as the Belgium account rose. Be sure to know that tiny Belgium has a rather notable current account deficit, no surplus funds to invest. Belgium has a GDP of $480 billion, the bulge fast approaching the size of their entire economy. Their chief export is tied closely to the hot air emanating from the EU Commission and Parliament, neither body possessing a scintilla of global integrity.
Wednesday, May 28, 2014
European Bonds Front Running ECB Setup for Disappointment / Interest-Rates / Eurozone Debt Crisis
By: EconMatters
June 5th ECB Meeting
There has been a lot on Bond Buying in Europe and that enthusiasm has transferred over to the United States with the thought that European Central-bank President Mario Draghi is going to embark on some massive bond buying stimulus program similar to the US Federal Reserve`s Bond Buying stimulus program. These moves in some of these European Bonds and even the US 10-Year Yield moving 20 basis points ahead of the announcement sure are setting bond markets up for some massive disappointment compared to the actual much hyped bond buying program announcement scheduled for June 5th.
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Tuesday, May 27, 2014
Hot Inflation Reports to Dominate Next Fed Meeting / Interest-Rates / Inflation
By: EconMatters
Important Econ-Inflation Events
The Federal Reserve meeting begins Tuesday June 17th with the FOMC meeting announcement the following day Wednesday June 18th which will be followed by their forecasts and the Fed Chair press conference.
In the last Fed meeting a weak housing concern cropped up on the Fed`s agenda, but all the housing data has rebounded in the latest economic reports with the spring weather, and the new concern at next month`s Fed meeting will be inflation.
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Thursday, May 22, 2014
Don’t be Fooled by QE Taper Talk / Interest-Rates / Quantitative Easing
By: Steve_H_Hanke
Since last June, most thought the U.S. Federal Reserve’s so-called taper was just around the corner. Well, the Fed’s large-scale asset purchasers did finally begin to take action, but they did so later than most anticipated. It now appears that the door will close on the Fed’s massive asset purchase program late this year. With this in mind, talk has turned to another aspect of the taper – just when will the Fed start to increase the federal funds interest rate? It probably won’t be anytime soon. Yes, the massive distortions created by the Fed’s interest rate manipulations (read: carry trade, among others) will be with us for longer than most anticipate. Why?
Wednesday, May 21, 2014
Did U.S. Fed Launder $141 Billion Through Belgium to Hide Massive Increase In Quantitative Easing? / Interest-Rates / US Federal Reserve Bank
By: Washingtons_Blog
Did the Fed Take Drastic and Covert Action to Hide a Large Country Dumping U.S. Bonds?
That’s what former Assistant Treasury Secretary and Wall Street Journal editor Paul Craig Roberts alleges:
Read full article... Read full article...Is the Fed “tapering”? Did the Fed really cut its bond purchases during the three month period November 2013 through January 2014?
Tuesday, May 20, 2014
May The Interest Rate Rise With You / Interest-Rates / Financial Markets 2014
By: Raul_I_Meijer
If global financial markets cannot set interest rates, they are distorted and dysfunctional by definition. Of course one may argue that they have long been distorted regardless, and there’s plenty merit to that, but without being able to determine interest rates, it is impossible for markets to become functional again, other than through a collapse so severe nobody wants to be seen dead with any paper ‘assets’ anymore. That is the inevitable fork in the road: either you allow interest rates to be – freely – set by markets, or you run head first into a market crash. There are other requirements too, like getting rid of bad debt, restructuring, allowing defaults and throwing out bankrupt zombifies market participants, but none of that will do much good as long as central banks and governments can claim the right of granting themselves the authority to set rates at whim.
Tuesday, May 20, 2014
U.S. Treasury Bonds - The Belgian Connection / Interest-Rates / US Bonds
By: Peter_Schiff
One of the biggest questions at the end of 2013 was how the Treasury market would react to the reduction of bond buying that would result from the Federal Reserve's tapering campaign. If the Fed were to hold course to its stated intentions, its $45 billion monthly purchases of Treasury bonds would be completely wound down by the fourth quarter of 2014. Given that those purchases represented a very large portion of Treasury bond issuance at that time, it was widely assumed by many, me in particular, that the sidelining of such huge demand would push down the price of Treasury bonds. Without the Fed's bid, interest rates would have to rise.Read full article... Read full article...
Sunday, May 18, 2014
Fed to Raise U.S. Interest Rates in 9 Months / Interest-Rates / US Interest Rates
By: EconMatters
James Bullard Speech
The biggest news to come out of Friday`s financial market activity was James Bullard’s thoughts on when he expects the Fed to start raising rates, he believes the Fed will start raising rates sometime near the end of the first quarter of 2015.
He also said, “While first-quarter GDP growth was weak, growth in coming quarters is still predicted to be robust,” according to slides for his speech. He added, “the average quarterly pace of growth in 2014 may still be an improvement relative to 2013.”
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