A paradoxical phenomenon occurred in the course of US interest rate cuts: Instead of falling, they moved higher in the medium term. The Federal Reserve cut its key interest rate by half a percentage point in September, raising expectations that other interest rates will soon begin to cut as well. By contrast, two-year and 10-year …
Tag: bonds
The REPO Act poses a problem to US Geopolitical Hegemony
In the wake of Russia’s military operation in Ukraine in 2022, the US government launched its most aggressive sanctions campaign ever. The US government and its allies have frozen about $300 billion of the Russian central bank’s accumulated foreign reserves. It was a stunning display of the political risk associated with the dollar and US …
De-dollarization is constantly being strengthened
The dollar is still a primary currency for spending, liquidity and foreign exchange. But it’s no longer the top savings asset. Gold (now a Tier-1 asset…) will continue to be a high-value reserve (ie, it holds its wealth) better than any amount of money. In any case, the dollar and US Treasuries are now quantitatively …
Weak development and the Global financial system with multiple problems
After the great financial crisis of 2007 – 2008, regulatory authorities, worldwide, are engaged in continuous efforts to remove, in every way, financial risks. However, mistakes on their part are not lacking. A typical example is the crisis of regional banks in the USA, which was triggered by Silicon Valley Bank, which until that time …
What do we expect about Stocks, Bonds and Gold for 2024?
Companies faced the spike in inflation to boost their profit margins – a phenomenon known as greed inflation. As a result, consumer prices have probably risen more than warranted, with cash hoards built up thanks to the expansionary fiscal policy of governments around the world during the pandemic making consumers less price-sensitive. Margins rise again …
The big risks that threaten the Markets for 2024
The pursuit of prediction verification is like a game, because rare and catastrophic extreme events are unpredictable. Therefore, it is better to approach accepting in advance the reality of market risks and to prepare for their possible appearance. 1. Expansion of the conflict in the Middle East After the Hamas attack on Israel on October …
US Treasuries are the new hot trend for the investments of the Hedge funds
For much of the past two decades, most of the U.S. government debt was stashed away in the vaults of the Federal Reserve, foreign central banks, and private banks that used it as a kind of cash reserve. At the height of the era of low cost money, the Fed was hoarding $100 billion a …
Why High Investment Grade Bonds remain the preferred choice?
Bonds and especially those characterized as high investment grade remain the preferred choice for Trust Economics. With yields trading at multi-year highs – a result of interest rate hikes by central banks – government bonds offer returns far better than any deposit account (even term deposits) while missing the risk of equity investments and commodities. …
Greece Returns Rapidly to the Era of Financial Support Packages
Greece, a member-country of the Eurozone/EU with 388 billion euros in public debt and a deindustrialized economy, is in danger of paying dearly for the EU sanctions imposed on Russia. The debt of the General Government of Greece, despite being sustainable in the medium term, despite being supported by the ECB and despite the fact …
Why Demand for Investment in European Bonds Is Growing
The fact that the ECB, through its programmes of the type of quantum easing (QE) and Pandemic Emergency Purchases Program (PEPP) respectively, provides the market with money, making it the main buyer of European government bonds, forces investors to create an informal queue to buy the remaining and smaller volume of European bonds offerings left …