The ECB decided to cut interest rates by 25 basis points on the same day it raised its own inflation estimates for 2024 and 2025. If anyone wants irrefutable proof of the lack of independence of central banks, this is it. The ECB has only one mandate, price stability, and it has violated it for …
Tag: interest rates
The consumer, the average citizen, continues to suffer…
In April, former US Treasury Secretary Larry Summers drew laughs from investors when he said the Fed’s next move might be tightening, not easing. In other words, Mr. Summers is predicting another rate hike, which could cause the markets to… explode. And the truth is that few traders are still laughing. Of course, the likelihood …
Slowly and steadily cracks are appearing in the Financial System
The FED raised interest rates above 5%, yet the US economy is not broken. The bond yield curve has been inverted since 2022 and has remained inverted ever since. The lags looked short, with the US economy only briefly causing concern in 2023 when there was a consensus among market participants that a recession would …
The FED is sacrificing inflation to keep the bond market from collapsing
The US Federal Reserve is in a race to prevent an imminent collapse in the US government bond market. High US debt yields are artificially kept at these levels as the Fed maintains demand by increasing the money supply in the economy – that is, by printing dollars and trying to control the bond yield …
How far or close are we from a painful crash?
The economic cycle we are experiencing is very different from most economic cycles we have experienced to date in our lifetimes. This means that we are in an income-led expansion, but also in an income-led consumption expansion, meaning that citizens in the US are enjoying wage growth of 6% per year, with personal consumption spending …
White House pushes FED for rate cuts and blows up 2% inflation target – Trump’s plan
New York Federal Reserve President John Williams said in a politically charged statement on Friday (5/3) that the US central bank needs independence from the White House in order to return inflation to its 2% target. The election cycle threatens the independence of monetary policy as pressure mounts for interest rate cuts to ease lending …
The vicious economic cycle continues
The fact that the Federal Reserve left interest rates unchanged, in the range of 5.25% – 5.5%, was of no concern to US stocks. On the other hand, he continues, the promise not to reduce them and to continue monetary tightening exerted downward pressure on bond yields, with the yield of the 2nd falling by …
Debt Colonies End: Non-Western Rating Agencies for the Global South
As the BRICS group seeks to develop alternatives to the Western financial system, the creation of credit rating agencies independent of the West could be on the agenda at their annual summit in October. In addition to developing an alternative payment system for trade transactions in local currencies, the Global South’s credit rating agencies could …
Hard austerity is coming with over-indebtedness and high inflation
The era of low interest rates and “easy money” is over, despite the dominant narrative in the international financial press of a new round of monetary policy easing that will return economies to pre-pandemic health crisis status and the prophecies of monetary policy makers policy that set the benchmark for monetary policy easing next June …
FED – ECB: Inflationary landmine with interest rate cuts – Trump victory in the US is the key scenario
The Bureau of Labor Statistics (BLS) argued that a pick-up in rent inflation—the index rose unexpectedly sharply in January’s CPI—was due to a shift in the data series that could either mean that the change was a structural shift in values or indeed an error which could be fixed at a later stage. Conclusion; No …