Federal Reserve to raise interest rates

The Federal Reserve is going to raise interest rates again soon – and this will drive some people crazy Probably sooner than you — or at least the market — think. In a speech in Philadelphia on Monday, Fed Chair Janet Yellen, speaking for the final time before the Fed’s June 15 meeting, said that another interest rate hike from the Fed does not require the central bank meet both parts of its dual mandate first. Here’s the key bit from Yellen’s speech (emphasis added): I continue to believe that it will be appropriate…

Financial Innovation

Financial Innovation and Trading Lies It is hard to measure, but I think there’s a decent case to be made that financial innovation has done good things for a lot of real-world businesses. Junk bonds and real estate investment trusts and master limited partnerships and receivables securitizations and other capital-structure developments have helped companies raise money and lower their costs and attract investors and grow. There are success stories, though many of them are kind of boring. But hoo boy are the failures entertaining. Enron is of course the all-time poster…

ETF Trends in Q1 2016

3 ETF Trends in Q1 2016 (XLU, VNQ) Three trends in exchange traded funds (ETF) in Q1 2016 are a recovery in rate-sensitive funds, strength in emerging market ETFs and strong flows into precious metal ETFs. Gains in these ETFs are reversals of major trends from the previous year, when low inflation and increases in short-term interest rates combined to put downward pressure on these groups. One major development crucial to the first quarter of 2016 was the Federal Reserve’s shift to a more dovish policy in response to financial market volatility…

Who gets the blame for the slowing economy?

Who gets the blame for the slowing economy?, not an easy question. ECONOMIC alarm bells are ringing: Financial markets have wilted. Forecasters have been slicing their projections for future growth. And some leading wise men — including the megabillionaire George Soros — are predicting a return to disastrous 2008 conditions. That’s almost certainly an overly pessimistic view. But without a doubt, the leading global economies are in a major slowdown. So, who gets the blame for the slowing economy? Not evident is whether another recession looms. While current data suggests…

Governments doing more and Central Banks less

G-20 wants Governments doing more and Central Banks less Finance chiefs from the world’s top economies committed their governments to doing more to boost global growth amid mounting concerns over the potency of monetary policy. In a pledge that will prove easier to write than deliver and may disappoint investors looking for a coordinated stimulus plan, the Group of 20 said “we will use fiscal policy flexibly to strengthen growth, job creation and confidence.” After a two-day meeting in Shanghai, finance ministers and central bank governors also doubled down on a line…