Tag: george yacik

So The Fed Raised Rates: Why Is the Market Acting Surprised?

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


It never ceases to amaze me how some people still react to and hang on to the words of former authoritative figures long after they’ve ceased to be relevant.

The other day 76-year-old Martin Sheen – Charlie’s father, for those under 40 – led a group of liberal has-beens and C-list “celebrities” urging Republican members of the Electoral College not to authenticate Donald Trump’s election. Does Sheen really believe people still care about what he thinks, if they ever did? Guess so.

While I admit that Janet Yellen and the other members of the Federal Reserve have hardly reached Martin Sheen status as irrelevant, I have to wonder about the market’s reaction to Wednesday’s decision by the Fed to raise interest rates an entire quarter point. Why did anyone care? Continue reading "So The Fed Raised Rates: Why Is the Market Acting Surprised?" →

A Fed Rate Hike Next Week Is A Lock - Right?

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


An interest rate increase at next week’s Federal Reserve meeting would seem to be a foregone conclusion. The Fed would look downright foolish if it didn’t raise rates. But can we take anything for granted when it comes to the Fed making rate decisions?

On the surface, you would have to guess that there is almost no chance the Fed will leave rates alone at next week’s meeting. Indeed, that’s what the bond market and the federal fund's futures market are saying.

The three-month Treasury bill is currently trading at 0.50%. That’s nearly triple the 0.17% it was trading at on September 20, which was also its lowest point this year. It’s also more than double the high end of the Fed’s current fed funds range of 0% to 0.25%. Given that comparison, the Fed would look seriously out of touch with reality if it didn’t raise rates at least 25 basis points this time around. If anything, the Fed is now playing catch-up, not leading the markets. In any event, rates are going up regardless of what the Fed does or doesn’t do. Continue reading "A Fed Rate Hike Next Week Is A Lock - Right?" →

The Screws Tighten On The Fed As The Fed Readies To Tighten

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


If we can believe Janet Yellen – or rather those who believe in what they think she means – then the Federal Reserve is going to raise interest rates at its next monetary policy meeting in December. This is perhaps an appropriate time for it to do so, as it looks like the Fed is about to enter a new era. Pressure is growing on the central bank to reform itself and the way it does business, including making monetary policy.

Once again, the Fed has shown itself to be following rather than leading the market. Last week, in congressional testimony, Yellen said the Fed may raise interest rates “relatively soon,” which most people expect means at its December 13-14 meeting. This in the wake of the recent 60 basis point surge in long-term interest rates since Donald Trump was elected president. The yield on the Treasury’s benchmark 10-year note is up 100 bps since July 8, during which time the Fed has kept rates unchanged.

Yellen told the Joint Economic Committee that “the economy has made further progress this year” toward the Fed’s employment and inflation goals. And indeed recent economic reports have borne that out, including those released last week: Continue reading "The Screws Tighten On The Fed As The Fed Readies To Tighten" →

Is The Spike In Bond Yields Trump's Fault?

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


Pretty much ever since Donald Trump threw his hat into the ring to run for president about 18 months ago, he’s been blamed for any number of things that have upset some people, no matter how preposterous.

He’s been blamed for recruiting Muslim fanatics to fight for ISIS. He’s been blamed for inciting violence at his own rallies, plus the riots that have followed his election. A middle school teacher in Berkeley, California - where else? - Blamed Trump after she had said she received an anonymous threat from neo-Nazis. I suppose if I spent enough time researching it I could find someone blaming Trump for killing Lincoln and Kennedy, the two World Wars and global warming - you just know he must have had something to do with that!

Now, since his stunning upset victory in the U.S. presidential election, bond yields have spiked to their highest levels since last January, and many people are putting the blame on him for that. Continue reading "Is The Spike In Bond Yields Trump's Fault?" →

Finally, The Fed Does Something Right

Posted on by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates


Like many people, I have been angered and outright disgusted by the mainstream media’s disgraceful behavior during the recent presidential campaign. Back in the late 1970s, when American journalism as we used to know it still existed, my college professors taught us that one of the purposes of a free press is to serve as a watchdog over the government. Since then that noble idea has been turned on its head, as a good part of the media has become an operating arm of the ruling class and one of the two major political parties.

But what particularly bugs me is when this liberal bias crops up where I don’t expect nor want to see it. In this case, I am referring to Bloomberg and its sister Businessweek magazine, of which I have been an avid reader and subscriber for the past several years. Unfortunately, this otherwise excellent business and financial news source has succumbed to the same liberal cheerleading as its mainstream brethren. Continue reading "Finally, The Fed Does Something Right" →