Highlights Economic data suggest the current business cycle in China has not yet reached a bottom. Stimulus measures have not been forceful enough to fully offset a slowing domestic economy and weakening global demand. With possibly…
Since 1990, when the Fed has surprised dovishly (the fed funds rate has turned out to be lower than the money market implied twelve months earlier), Treasuries have almost always generated positive excess returns over cash.…
The Reserve Bank of New Zealand (RBNZ) cut rates by 50bps yesterday, stunning investors who expected only a 25bp cut. That took the Official Cash Rate to a record low of 1%, perilously close to the zero interest rate bound…
The textbook answer to the title question is that a lower Fed funds rate directly reduces the cost of financing big-ticket consumer purchases and corporate initiatives while indirectly nudging households and corporate managers to…
The Bank of England (BoE) held rates steady at last week’s Monetary Policy Committee (MPC) meeting, keeping the Bank Rate at 0.75%. The MPC modestly lowered its growth forecasts for 2019 and 2020 due to the dual…
The Fed cut rates yesterday for the first time since the depths of the financial crisis in December 2008, lowering the target range for the funds rate by 25bps to 2-2.25%. The move was expected by markets, but the FOMC did…
The latest batch of data from the U.S. suggests that today’s widely-expected Fed rate cut may be a one off. Expect a 25bp cut, with forward guidance open to another 25bps in September to protect against the adverse…
Given how loose monetary conditions already are, it makes sense for the ECB to restart the Asset Purchase Program (APP). This option is the most direct way for the ECB to directly lower the cost of borrowing for European…
Highlights The global manufacturing cycle has averaged about three years in length (peak-to-peak). We are near the bottom of the current cycle, which should set the stage for a recovery phase lasting around 18 months. The global…
In a range of -1 to 2 percent, inflation expectations become insensitive to monetary policy. So in their obsession to achieve two point zero, central banks have pushed harder and harder on a piece of string. As a result, the…