Analysis Topic: Interest Rates and the Bond Market
The analysis published under this topic are as follows.
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
Yesterday'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.
Wednesday, April 27, 2011
U.S. Debt Saturation and Money Illusion / Interest-Rates / US Debt
By: Gordon_T_Long
Most of the clearly evident financial problems that surround us today stem from one cause - Debt Saturation.
Most, intuitively, sense this to be a correct assessment but few can either prove it or articulate it to the less sophisticated. Let me arm you to be the "Nostradamus" amongst your friends and colleagues in explaining the problem and what the future therefore foretells.
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Wednesday, April 27, 2011
Financial Press Talking Heads Focus on Bernanke's QE2 Money Printing Speech / Interest-Rates / Quantitative Easing
By: Nadeem_Walayat
The mainstream press talking heads that repeatedly rely on near always wrong ivory tower academics that is further regurgitated at length by the BlogosFear will today be focused on the latest utterances from Fed Chairman, Ben Bernanke, as if by magic he is going to pull new rabbits out of the hat that will surprise the financial markets with rumours of the early end of QE2.
Wednesday, April 27, 2011
Nominal Yield (minus) TIPS = Inflation Expectations / Interest-Rates / Inflation
By: Tony_Pallotta
One way to determine inflation expectations is to take the treasury or nominal yield (not inflation adjusted) and subtract the TIPS or real yield (inflation adjusted). The difference of the two is the expected inflation.
Nominal Yield (minus) TIPS = Inflation expectation
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Tuesday, April 26, 2011
What Exactly is the Function of the Federal Reserve Bank? / Interest-Rates / Central Banks
By: EWI
What exactly is the function of the Fed? If it's to help the U.S. economy grow steadily, then how come in 2007-2009 we had the biggest stock market crash in decades followed by "the Great Recession" and a worldwide financial crisis?
For answers, let's turn to someone who has spent a considerable amount of time studying the Fed and its functions: EWI's president Robert Prechter.
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Tuesday, April 26, 2011
How the Fed Could Kill the U.S. Dollar Tomorrow / Interest-Rates / Quantitative Easing
By: Money_Morning
Martin Hutchinson writes:
Months or years from now, when analysts are studying the death of the U.S. dollar, they'll look back and see that the greenback's demise began on a specific day - Wednesday, April 27, 2011.
As in ... tomorrow.
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Monday, April 25, 2011
U.S. Waking Up to Economic Realities / Interest-Rates / US Debt
By: Dr_Ron_Paul
Last week the financial markets were roiled by Standard & Poor's announcement that they will change their outlook on the fiscal health of the United States over the next two years from "stable" to "negative". The administration decried this decision as political. However, it seems the only political thing about this decision is the fact that it took so long. The Washington Post recently reported that the White House and the Treasury Department put tremendous pressure on S&P not to do this.
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Monday, April 25, 2011
Warning: Investors Still Confident in the US Bond Market / Interest-Rates / US Bonds
By: Bill_Bonner
First let us catch up with a news report from earlier this week. Bloomberg:
April 18 (Bloomberg) – Standard & Poor’s put a “negative” outlook on the AAA credit rating of the US, citing a “material risk” the nation’s leaders will fail to deal with rising budget deficits and debt.
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Sunday, April 24, 2011
Global Monetary Policy Tightening / Interest-Rates / Central Banks
By: Submissions
centralbanknews writes: Global monetary policy tightening continued through the past week. Central Banks that increased interest rates included those of: Thailand +25bps to 2.75%, Sweden +25bps to 1.75%, and Brazil +25bps to 12.00%. Meanwhile those that opted to hold interest rates unchanged were: Hungary at 6.00%, Iceland at 4.25%, and Turkey at 6.25%. Aside from interest rate changes the week also saw another 50 basis point increase in China's required reserve ratio, bringing the average ratio for large banks to 20.50%, and the Central Bank of Turkey increased two of its reserve ratios by 100bps. Elsewhere the Belarusian central bank instituted a secondary currency market, taking a step in the direction of a freely floating currency.
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Sunday, April 24, 2011
Why the Fed Must End QE2 on April 27th / Interest-Rates / Quantitative Easing
By: Dian_L_Chu
The Federal Reserve has lost all credibility on Wall Street, and most of the American public with the absolute refusal to recognize the dire effects on asset prices that QE2 has created. But the refusal is part of the problem. It reinforces the wide spread belief of investors that the Fed is out of touch with reality, and that they sit in their Ivory Tower implementing an exceedingly loose monetary policy, with the stated goal of inflating asset prices.
Saturday, April 23, 2011
Downgrades Galore, U.S. Debt Becomes Scary / Interest-Rates / US Debt
By: Dr_Jeff_Lewis
As if there weren’t already ample reasons not to purchase US Treasury securities, the ratings agency Standard and Poors’ has provided investors with another reason: it may soon be downgraded.
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Friday, April 22, 2011
Bernanke Strikes Again, QE2 sends margin debt soaring to new highs / Interest-Rates / Quantitative Easing
By: Mike_Whitney
Interest rates are the Fed's main tool for implementing policy, but when interest rates are already at zero and activity is still weak, then the Fed may try other unconventional strategies to rev up the economy. Quantitative Easing (QE) is one such strategy. In practice, it works like this; the Fed purchases some type of financial asset (stocks, bonds, mortgage-backed securities) which adds to the money supply thereby creating (in effect) negative interest rates. The Fed believes that this "monetary easing" can stimulate the economy.
Friday, April 22, 2011
Does the United States Still Deserve its "AAA" Credit Rating? / Interest-Rates / Credit Crisis 2011
By: Money_Morning
Kerri Shannon writes: Could the United States lose its status as the world's premier safe harbor for global investors?
Credit-rating heavyweight Standard & Poor's this week threatened to cut the United States' top-tier credit rating, saying the country's political infighting and burgeoning debt may warrant a downgrade.
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Friday, April 22, 2011
Raising U.S. Debt Ceiling Spells Economic Disaster / Interest-Rates / US Debt
By: LewRockwell
Jeff Scribner writes: Nero fiddled while Rome burned. The President and the Congress are playing political games while the national debt grows to out of control proportions. We should hold the government’s feet to the fire and force an end to spending using borrowed money. An opportunity to do this will arise in a month or so.
Thursday, April 21, 2011
Uncle Sam Busted, The S&P U.S. Debt Rating Announcement / Interest-Rates / US Debt
By: Robert_Murphy
On Monday, Standard and Poor's (S&P) announced that although the US government would retain its AAA debt rating, the outlook for the United States' future was being downgraded from "stable" to "negative." The move is a welcome if tepid acknowledgement of the fiscal train wreck of which Austrians have been warning for years.
Thursday, April 21, 2011
Bernanke's QEx Money Printing Box / Interest-Rates / Quantitative Easing
By: Gordon_T_Long
Chairman Bernanke has placed himself in a box. It is not a box of his choosing, but rather the result of his misguided economic beliefs, use of flawed statistical data, geo-political events occurring during his watch, poor decisions and a penchant for political pandering. Some of these may be requirements for academia success but not for leading global financial markets during turbulent times.
Thursday, April 21, 2011
How to Dodge the Coming U.S. Treasury Bond Market Crash / Interest-Rates / US Bonds
By: Money_Morning
Martin Hutchinson writes: We're on a collision course with the worst bond market collapse in decades.
The warning signs are as clear as day.
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Thursday, April 21, 2011
Understanding the Fed, Explaining Common and Misleading Myths about the U.S. Federal Reserve Bank / Interest-Rates / Central Banks
By: EWI
What exactly is the function of the Fed? If it's to help the U.S. economy grow steadily, then how come in 2007-2009 we had the biggest stock market crash in decades followed by "the Great Recession" and a worldwide financial crisis?
For answers, let's turn to someone who has spent a considerable amount of time studying the Fed and its functions: EWI's president Robert Prechter.
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Wednesday, April 20, 2011
Quantitative Easing and the Fed Balance Sheets 50% Contraction / Interest-Rates / Quantitative Easing
By: John_Mauldin
Dr. John Hussman is no stranger to Outside the Box readers. And his recent posting has my mind reeling. In essence he is saying that if the Fed wants to stop the QE and allow rates to rise, they must either reverse the QE or bring on inflation. And he does it with numbers and his usual strong reasoning. I really did read this 3-4 times, thinking through the implications.
Wednesday, April 20, 2011
Government Debt Bubble Targeted with S&P Outlook / Interest-Rates / US Debt
By: Jason_Kaspar
Washington has been placed on notice that it’s reckless spending and unfathomable fiscal debt is not immune to the censure of Wall Street.
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