(This post was posted in Nov 2022) The Federal Reserve’s November 2022 statement contained dovish language, but Fed Chair Powell warned investors not to expect the Fed to stray from its full focus on fighting inflation. Upside inflation led the U.S. Federal Reserve to hike its policy rate by 75 basis points (bps) for a historic fourth time. This brought the fed funds rate up to a 3.75%–4% range, meaningfully above the Fed’s 2.5% median long-run estimate, as inflation continues to justify monetary policy with the objective to tame inflation. In spite of continued inflation, the Fed also indicated
Category: Economics
Irrational Exuberance 2.0: Another Tech Bubble a la circa 2000?
Posted Aug 27, 2020 We are watching the US Stock Market indices rising dramatically in the last few weeks, with Tech Stock Prices leading the charge upwards. We are almost back to March 2020 levels. This Bull Market has been fueled by dramatic rise in stocks of Tech Titans like Amazon, Tesla, Apple, Facebook, Twitter to name the notable few. In fact, Tesla’s stock has been on a tear since March and is now up ~600% leading to a humorous remark making the rounds “Tesla Bears – stay in your caves” which aptly sums up this irrational exuberance sentiment.
Economics, Financial Markets, US Federal Government Oversight, US Fiscal Policy, US Monetary Policy, US Stock Market
Fed’s Good Call today – Thank you for signaling a more data driven, cautious and market-friendly approach
(Published January 30, 2019) We are extremely delighted and relieved, in equal measure, that the Federal Reserve held its key interest rate steady today. “The case for raising rates has weakened somewhat,” Fed Chairman Jerome Powell said at the post FOMC Meeting news conference. He also indicated that a “wait and see attitude with patience is warranted”. “The U.S. economy is in a good place, and the current policy stance is appropriate” he said, but added there’s growing evidence of “crosscurrents,” such as slowing growth in China. “In light of global economic and financial developments and muted inflation pressures, the
“To Raise or not to Raise (Rates) is the Question….” – Conundrum facing the Fed this month
Published December 10, 2018 “To Raise or not to Raise (Rates) is the question…” – would best describe Federal Reserve’s position, if we were to apply the Bard of Avon’s immortal quote from Hamlet, to the likelihood of hiking the Interest Rate in their December 19 FOMC Meeting. Trade war fears along with the specter of a possible economic slowdown have sent markets down significantly in the last couple of weeks. Consequently, it is reported by CME that Investors currently see a 73.2% chance of a rate hike following the December Fed meeting, while a week ago, the probability for
Federal Reserve, buoyed by stronger economy, lifts rates again. Is it time to pause further Rate Hikes? Our Appeal to the Fed
Published on Dec 20, 2017 The Federal Reserve raised short-term interest rates by a quarter point last week as the U.S. economy continues to be on get healthier. The rate hike, which was widely expected, was the third this year as Policy makers pointed to the lower number of unemployed workers, increased spending by households, and bigger investments by businesses in recent quarters. This is the fifth time the Fed has lifted interest rates since the 2008 financial crisis and will now hover in a range of 1.25% to 1.5%. Overall, rates are still historically low. The Fed put
Full Global Recovery after Great Recession of 2007 has occurred – What Next for our Trade Negotiations?
Published in Oct 2017 Based on data published by International Monetary Fund (IMF), it appears that we have successfully recovered from the Great Recession of 2007. Global Growth has picked up around the world in what is being termed as “synchronized global growth” across the globe. Hence, ten years after the Great Recession started, global economic growth is accelerating and stock markets around the world are hitting record highs. The IMF stated that “The outlook is strengthening, with a notable pickup in investment, trade, and industrial production, together with rising confidence.” However, this has been tempered with the caveat
NAFTA 2.0 Renegotiations Kickoff – Fair and Favorable to our American Interests needed urgently
Posted before NAFTA Renegotiations started on Aug 15, 2017 Bilateral negotiations between USA, Canada and Mexico are scheduled to start tomorrow to renegotiate NAFTA (North American Free Trade Agreement) which was earlier signed into law in the 1990s. NAFTA was negotiated with the premise that countries in North America had deep relationships and North Americans compete as a block (bound competitiveness). However, in the intervening two decades, we have seen that the business landscape has undergone a sea change since the original NAFTA was negotiated when internet commerce did not exist. In the guise of an Inclusive Trade Agenda,
Why do people always vote against their economic self interest?
Published earlier in Jan 2015 in my earlier Blog – Ported here in Aug 2017: We always wonder during elections why the middle class generally vote for candidates with conservative values (right side of the aisle) while the wealthy typically vote for liberal (left leaning) candidates. We believe that this occurs because middle class voters identify more with parties with conservative values who are typically socially conservative with pro-life, pro 2nd Amendment, anti-abortion, religious with family values agenda while wealthy voters tend to gravitate towards liberal parties who have a more “progressive” agenda with a pro-choice, anti 2nd Amendment, pro-abortion and non-religious