Econintersect: The Federal Open Market Committee (FOMC) – the board of directors of the Federal Reserve raised the federal funds rate. There was one dissenting vote. A summary of how the members viewed the economy: …. business fixed investment appears to have firmed somewhat. Inflation has increased in recent quarters, moving close to the Committee’s 2 percent longer-run objective …. Analyst Opinion of the FOMC Meeting Minutes Not much can be added as this outcome was generally expected. The only surprise was the dissenting vote. The Federal Funds rate was increased from 0.50 % to 0.75 % to 3/4 to 1 percent. Bloomber...
With just hours left until the United States Federal Open Market Committee unveils its latest monetary policy decision, gold prices are consolidating just above the key psychological level sitting at $1200 per troy ounce. In what may prove to be a pivotal moment for the precious metal, much hinges on the upcoming announcement as the Federal Reserve works to build its case for gradual increases in the Federal Funds rate. While markets are considering a rate hike a near certainty, the real question remains as to whether two more subsequent increases are going to be delivered before the end of 2017. Although the language is unlikely to be extrem...
As expected, the Fed hiked interest rates 25 basis points to a range of 3/4 to 1 percent. Minneapolis Fed president Neel Kashkari dissented. Kashkari voted to hold rates steady. Here are snips from the FOMC March 15 Statement. In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation. In determining the timing and size of future adjustments to the target range for ...
Financial sector has been on a stellar ride this year having gained 5.6% thanks to the dual tailwinds of the Fed’s rate policy and Trump presidency. Improving economic fundamentals and industry trends added to the strength though some analysts are concerned about higher valuations. Below we discuss some strong reasons for investing in financial ETFs now. Fed Policy The Fed is likely to raise interest rates by 25 bps to 0.75–1% from 0.50–0.75% later today in its latest monetary policy decision. Per the latest CME Group poll, the odds for a rate hike shot up to 93% from just 25% in the beginning of February. This would represent the third...
Much like our clocks this past weekend, the Federal Reserve (Fed) decided to “spring forward” with its monetary policy decisions. In what had become only recently a highly telegraphed move, the voting members implemented another 25 basis points (bps) increase in the target range for the Federal Funds Rate at their March policy convocation. However, prior to this action, the markets had been operating under the assumption that the first rate hike for 2017 would happen in June, not three months earlier. So, the natural questions are: what was the reasoning behind this latest rate hike, and where does that leave potential policy de...
The best mid cap sector is industrial goods. The top mid cap industry is semi ICs. The average score for mid cap stocks in our universe is 66.77 and the average score over the past four weeks is 69.09. The average mid cap stock in our coverage is trading -14.55% below its 52 week high, 4.26% above its 200 dma, has 6.42 days to cover short, and is expected to grow EPS by 15.9% next year. Industrial goods, technology and consumer goods score above average this week. Services and financials score in line with the average universe score. Healthcare, basics, and utilities score below average. Semi ICs (MSCC), movies (CNK, RGC), residential const...
The lack of uber-hawkishness in the dot-plot appears to have been enough for dollar-buyers to desert the trade in the short-term. The reaction to The Fed’s 3rd hike in 11 years is buying bonds, buying stocks, and buying bullion… For now banks are losing and gold is winning…...
Fed Announcement by Janet Yellen Hikes Interest Rates Again Below is the Fed announcement and the FOMC Statement regarding the 0.25% interest rate hike: Information received since the Federal Open Market Committee met in February indicates that the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace. Job gains remained solid and the unemployment rate was little changed in recent months. Household spending has continued to rise moderately while business fixed investment appears to have firmed somewhat. Inflation has increased in recent quarters, moving close to the Committee’s...
Remember what we said earlier? To wit, from “A Fed Hike Will Send Treasury Yields Higher Right? Not So Fast” posted just hours ago: Well, “we told you so”… TREASURIES SURGE AS FED MAINTAINS HIKE FORECASTS FOR 2017, 2018 Treasuries advanced to session highs after FOMC median dot projections were left unchanged for 2017 and 2018 while median target for 2019 rose to 3% vs 2.875% in December. Treasury futures rally with 10Y higher by around 16 ticks following decision; 5s30s sharply steepens by ~5bp from near flattest levels since 2008...
Market dislocations occur when financial markets, operating under stressful conditions, experience large widespread asset mispricing. Welcome to this week’s edition of “World Out Of Whack” where every Wednesday we take time out of our day to laugh, poke fun at and present to you absurdity in global financial markets in all its glorious insanity. While we enjoy a good laugh, the truth is that the first step to protecting ourselves from losses is to protect ourselves from ignorance. Think of the “World Out Of Whack” as your double thick armour plated side impact protection system in a financial world littered with drunk drive...