Category Archives: Economic Analysis

Yellen’s testimony hints at rate-hike timing

Federal Reserve (Fed) Chair Janet Yellen delivered the semiannual Monetary Policy Report to the Senate today (she’ll deliver it to the House tomorrow). When she delivered the report on February 27, 2014, it set off a sell-off in small-cap stocks, … Continue reading

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ECB Minutes: More minutia than minutes

For the first time in its history, the European Central Bank (ECB) released the minutes of its policy meeting. This was good timing as the minutes were from one of the most important ECB meetings, the one where it announced … Continue reading

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Greece keeps playing bailout games

On Monday, talks between Greek officials and the Eurogroup (a group of finance ministers throughout the eurozone) broke down quickly. It seems as though the Greek finance minister was irked about the wording of a preliminary statement that extended Greece’s … Continue reading

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The Fed’s patience cuts two ways

I found the market reaction to the Federal Open Market Committee’s statement perplexing. Initially, the stock market rallied, the dollar weakened, and oil went up. These are the things I thought should happen with the Federal Reserve (Fed) expressing more … Continue reading

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FOMC: More hints of dovishness

In a unanimous vote, the Federal Open Market Committee (FOMC) kept monetary policy unchanged. The FOMC acknowledged that the economy has been expanding at a solid pace rather than merely a moderate pace. The labor market also got an upgrade, … Continue reading

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What’s next for Europe?

Summary The European Central Bank’s (ECB’s) bond-buying program is coming at a time when the banking system is ready to start lending again, so it’s like running with the wind at your back. The rise of the anti-austerity Syriza party in Greece … Continue reading

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ECB’s shock and awe—or confusion?

The European Central Bank (ECB) defied my expectations and said it intends to purchase 60 billion euros of investment-grade debt per month until September 2016. That intention can change, giving the ECB flexibility to expand and contract the asset-purchase program … Continue reading

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Swiss National Bank and Reserve Bank of India deliver some surprises

Monetary policy works best (for good or bad) when it is surprising. Doing what’s expected tends not to create waves. So when the Swiss National Bank ended its three-year cap on the Swiss franc-to-euro exchange rate and, in an unrelated … Continue reading

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Retail sales unimpressed by lower gas prices

The drop in the price at the pump hasn’t yet translated into a surge in consumer spending. Retail and food-service sales dropped in December by 0.9%, according to the Census Bureau. Gasoline station sales fell 6.5%, as the rapid decline … Continue reading

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Bonds: 2014 year in review

The biggest bond market stories in 2014: Poor performance of the weakest corporate credits Strong performance by the weaker municipal credits Solid performance of the longest Treasuries Poor performance of the weakest corporate credits The second half of 2014 was … Continue reading

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