With stocks soaring briskly around the globe following Yellen’s “dovish” hike, and futures set for a sharply higher open with the Nasdaq approaching 6,000, something surprising caught our attention: in a note by Goldman’s Jan Hatzius, the chief economist warns that the market is overinterpreting the Fed’s statement, and Yellen’s presser, and cautions that it was not meant to be the “dovish surprise” the market took it to be.
Specifically, he says that while the FOMC delivered the expected 25bp hike, with only minor changes to its projections. “surprisingly, financial markets took the meeting as a large dovish surprise—the third-largest at an FOMC meeting since 2000 outside the financial crisis, based on the co-movement of different asset prices.”
Even more surprisng is that according to Goldman, its financial conditions index, “eased sharply, by the equivalent of almost one full cut in the federal funds rate.”
In other words, the Fed’s 0.25% rate hike had the same effect as a 0.25% race cut!Continue reading →
Even one small interest rate increase by the Fed could have a sweeping impact on U.S. and world economies, Komal Sri-Kumar told CNBC on Monday.
“I think they are going to hike” on March 15, Sri-Kumar said on “Squawk Box,” echoing a theory shared by many analysts. “But that is going to prompt capital outflows from the euro zone, especially with the political risk. It is going to increase the capital outflow from China, and the U.S. economy will feel the impact.”
These moves would strengthen the dollar against other currencies, putting downward pressure on the euro, said Sri-Kumar, president of Sri-Kumar Global Strategies. Continue reading →
The Dow has soared 13% since Election Day, and just last week (Feb. 10), all three major indexes closed at all-time highs. The “Trump Rally” has been great for stocks, but some observers are starting to wonder if soaring highs mean a stock market crash is coming.
No one can predict a stock market crash with 100% certainty. But we want our readers to be as informed as possible about what could happen in the market.
That’s why we’re looking into historic stock market crashes to identify warning signs that can be used now. Continue reading →
(Natural News) Editor’s note: Donald Trump is officially the president of the United States. But what happens now could change everything…in sudden, unexpected ways.
Today, we’re featuring another important essay from Crisis Investing editor Nick Giambruno on this topic. On Wednesday, Nick said Trump could go down as the worst president…but it won’t be his fault. Today, he gives more reasons why Trump is destined to fail…and what you should be watching closely today.
The mainstream media hates him. Hollywood hates him. The “Intellectual Yet Idiot” academia class hates him.
The CIA hates him. So does the rest of the Deep State, or the permanently entrenched “national security” bureaucracy.
They did everything possible to stop Trump from taking office. None of it worked. They fired all of their bullets, but he still wouldn’t go down.
Of course, the Deep State could still try to assassinate Trump. It’s obvious the possibility has crossed his mind. He’s taken the unusual step of supplementing his Secret Service protection with loyal private security. Continue reading →
As has been said here oft: It doesn’t matter who wins the election. Dozens, if not hundreds, of poison pills will be left behind in a very paralyzed four years for Trump should he win. In a Hillary win, you could expect an accelerated decline. Economics, as discussed here is but one facet of the multiple fronts about to face impact.
Regardless of who wins the election, one thing is certain: the vote that takes place in December within the confines of the Eccles Building cast by a dozen un-elected, Ivy Leagued, academic bankers whose combined real world business experience is near nonexistent (less for that read in some wood-paneled library) will decide monetary policy that will have more implications for not only the U.S., but the world as a whole. Effecting not only the global financial markets, but quite possibly, the entire international political stratum as well. And the new President (as well as every other world leader) will have to adjust to that outcome.
November 8th is only the first-act of this very real, “landmine” infested global drama playing out on the world stage. On December 14th the world will truly witness just how much power has really been transferred to this unelected cohort.Continue reading →
The Federal Open Market Committee, in its latest meeting Wednesday, reiterated the same message to spellbound investors that’s been in place the last eight years: The Fed is committed to maintaining a massive balance sheet through bond buying, but someday that balance sheet and near-zero interest rates will revert to normal levels. Continue reading →
For decades, a growing pool of college graduates poured into the U.S. labor market, boosting productivity and shaping America’s status as the world’s dominant economic power.
That driver of growth is diminishing. Enrollment has declined every year since peaking in 2011, according to the Census Bureau and the National Student Clearinghouse Research Center. The reasons include an aging population, rising tuition costs and a healthy rate of hiring that lessens the demand for learning. Continue reading →
(TRUNEWS) Following Janet Yellen’s speech Monday, economic analyst and frequent TRUNEWS guest Peter Schiff has published an article laying out what he thinks is the truth behind the Fed’s jargon, and the likelihood of an interest rake hike before the November elections.
Stop me if you’ve heard this one before: A Fed official walks into a bar and says the economy is improving and rate hikes are appropriate. The patrons order another round to celebrate. Then disappointing data comes out, the high fives stop, and the Fed official ducks out the back…only to come back the next day saying the same thing. Anyone who pays even the smallest attention to the financial media has experienced versions of this joke dozens of times. Yet every time the gag gets underway, we raise our glasses and expect the punch line to be different.But it never is. Last week was just the latest re-telling.
Janet Yellen’s remarks today confused the people who think the world turns on the Jobs numbers since they remain clueless with respect to the changing trend in employment. They do not take into consideration the technology shift, so they are still trying to trade from 20th-century concepts. Yellen gave an outlook of the U.S. economy and said that interest rate hikes are coming. Higher rates are needed for pension funds, and the decision will cause the stock market to take off which will appear like asset inflation. Continue reading →
Recently, I told you I was working on a special world currency report, with profit recommendations for a large basket of currencies.
The simplest way to do this is to start with the Big Five. These major currencies serve as the “drivers” for the minor ones. In my upcoming Part 2, I’ll tell you which of the minor currencies (like the Aussie dollar or the Swiss franc) are tied to which of the major ones, how that impacts their direction, and how you can profit.
After a brief hiatus from the ongoing currency wars, China fired another salvo at The Fed tonight by devaluing the Yuan fix to 6.5693 – its weakest against the USD since March 2011. After eight days higher in a row for The USD Index, it seems PBOC has turned its currency liberalization plan off, stabilizing the broad Renminbi basket (which has been steadily devalued) and turning its attention to devaluing against the USD. Having unleashed turmoil in August (pre-Sept FOMC) and January (post Dec rate-hike), it appears the rising rate-hike probabilities jawboned by The Fed are decidedly disagreeable to “authoritative persons” in China. Continue reading →
COMMENT: Marty, well it looks like you have done it. The central banks are going to start raising interest rates right in line with your model. It is interesting how your computer puts the entire world before you to see. Keep up the good work. They obviously are starting to follow you.
As it goes, the alleged Shanghai Accord was a side meeting of only a handful of economic policymakers (in Shanghai – hence the name) that took place concurrently with the G20 Summit on Feb. 26.Attendees of the clandestine powwow included U.S. Federal Reserve Chair Janet Yellen, U.S. Secretary of the Treasury Jack Lew, Christine Lagarde from the IMF, Mario Draghi from the ECB, and central bank and finance ministry counterparts from China and Japan.
The chief reason for the Shanghai Accord was to allow these choice global policymakers a chance to plan the demise of the U.S. dollar.