Tag Archives | US Federal Reserve

Markets need more cash from the Janet Yellen tooth fairy

Central banks have acted as the proverbial tooth fairy towards financial markets in recent years.  But they have not just left a small amount of money under the pillow when a child lost its first tooth.  Instead they have printed trillions of dollars via Quantitative Easing (QE), to persuade investors to buy shares and commodities, […]

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Q2 results highlight continued uncertainty over outlook

The chemical industry continues to be the best leading indicator we have for the global economy. Whilst stock markets were continuing to move higher during H1, its depressed level of capacity utilisation was signalling that the economy was far more fragile than generally realised. Company results for Q2 reflect this concern. Of course some, tied […]

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Yellen offers hostage to fortune on US growth

Previous chairs of the US Federal Reserve had a poor record when it came to forecasting key events: Alan Greenspan, at the peak of the subprime housing bubble in 2005, published a detailed analysis that emphasised how house prices had never declined on a national basis Ben Bernanke, at the start of the financial crisis […]

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Fears of Austerity rise again, as Stimulus proves ineffective

Austerity is in the news again, as the Greek/Eurozone debt negotiations continue.  So it seems interesting to see how financial market sentiment has been moving with regard to the issues of austerity and stimulus.  The above chart is therefore modeled on the familiar IeC Boom/Gloom Index It shows the ratio of sentiment for Austerity versus […]

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Fed’s loss of credibility risks causing investor stampede

Credibility is hard to gain.  And once gone, it is very hard to regain.  That is the challenge facing the US Federal Reserve today.  The New York Times is just one of the mainstream media now starting to highlight the issue, as last week’s Fed meeting led to a further deferral of the promised rise […]

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US margin debt hits record highs, whilst interest rates jump

Everyone knows that the US Federal Reserve will “never” let stock markets fall.  So it makes perfect sense for investors to borrow as much as they can, in order to chase the market higher.  It therefore is no surprise to see that borrowing to fund purchases on the New York Stock Exchange has reached a […]

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Policymakers’ out-of-date economic models fail to create growth, again

Since 2010, May/June has seen the US Federal Reserve start to realise it would have to revise its optimistic New Year forecast that economic recovery was inevitable. As its deputy chairman, Stanley Fischer, noted last August “Year after year we have had to explain from mid-year on why the global growth rate has been lower than […]

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US jobs growth fails to keep pace with population growth

The US population reached 320m this year, an 11.35m increase versus 2010, according to the US Census Bureau: “The U.S. is expected to experience a birth every 8 seconds and one death every 12 seconds, whilst net international migration is expected to add one person to the U.S. population every 33 seconds.  All these factors […]

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“Sell in May and go away?” as US/German bond yields jump

A strange thing happened to German 10-year interest rates last week – they rose quite sharply, by a further 0.2%. That may not sound a lot, but it is when the starting point is so low.  On 20 April, they were at 0.07%, and on Friday they closed at 0.37% – for a total rise […]

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US GDP disappoints again as aging Boomers slow the economy

“Year after year we have had to explain from mid-year on why the global growth rate has been lower than predicted as little as two quarters back.” That was the comment, last August, from the new deputy chairman of the US Federal Reserve, Stanley Fischer.  This year, he won’t have to wait until mid-year to start the […]

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