Tag: interest rates

When Did Market Stability Become A Fed Mandate?

Posted on by George Yacik

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


According to the Federal Reserve Act, in which Congress created the Federal Reserve System back in 1913, the U.S. central bank was given the following statutory objectives for conducting monetary policy: maximum employment, stable prices and moderate long-term interest rates.

The Fed has since given itself an additional mandate: market stability. Congress didn’t grant the Fed that power, but that seems to be the Fed’s overriding concern lately. In the process, it’s succeeded in creating what some very smart people believe is the biggest bond bubble of all time, and a pretty big one in equities, too. It’s pushed more and more of the country’s wealth into the pockets of the so-called 1%. It’s also given some people a false sense of financial security that the Fed has created a floor – a guaranteed return, if you will – under which investment returns will not be allowed to fall. Continue reading "When Did Market Stability Become A Fed Mandate?" →

Are We Ready For Negative Interest Rates?

Posted on by George Yacik

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


With interest rates on 10-year Japanese government bonds already deep into negative territory and comparable German bunds just a basis point or two away, most of the world’s safest debt instruments are trading below zero. With the notable exception of U.S. Treasuries.

While we’re still a long way from reaching that point – the benchmark 10-year Treasury note ended last week at 1.64%, its lowest level in nearly a year-and-a-half and down more than 60 basis points so far this year – it’s certainly not too early to start thinking about it. After all, if it can happen in Germany and Japan and several other countries, why not here?

Switzerland’s 10-year government bond closed last week at negative 0.50%, while the comparable Japanese bond ended at minus 0.15%.
Germany’s 10-year bund, the benchmark for the euro zone, closed at just two basis points above zero. The average yield on all German government debt outstanding is now below zero.

In real life, this means that if you buy a Swiss or Japanese bond today and hold it to maturity, you’re guaranteed to lose money. Such a deal.

What’s driving this madness? Continue reading "Are We Ready For Negative Interest Rates?" →

Will They Or Won't They?

Posted on by The INO.com Team

The Federal Reserve will release their minutes from April's FOMC meetings on Wednesday at 2 p.m. The notes should shed some light on whether they are leaning towards raising interest rates or leaving them as is again.

Even though there hasn't been any recent public comments from Fed Chair, Janet Yellen, or Stanely Fischer, several regional Fed presidents have said as recently as last week that a move could be possible in June or July. Keep an eye out as Yellen speaks at Harvard University on May 27th and Fischer delivers remarks Thursday in New York.

What do you think?

Will the Fed raise interest rates in June?

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Please take a moment to vote and leave a comment about the Federal Reserve's coming decision.

Key levels to watch this week:
S&P 500 (CME:SP500): 2,099.89
Dow (INDEX:DJI): 18,084.66
NASDAQ (NASDAQ:COMP): 4,915.00
Gold (FOREX:XAUUSDO): 1,264.34
Crude Oil (NYMEX:CL.M16.E): 45.75
U.S. Dollar (NYBOT:DX.M16.E): 95.10

Every Success,
Jeremy Lutz
INO.com and MarketClub.com

Can The Fed Drop Interest Rates Below 0%?

Posted on by The INO.com Team

By: Elliott Wave International

This question is not as preposterous as it may seem.

For the financial markets, the biggest event of the week starts tomorrow: On Wednesday and Thursday (Feb. 10-11) Fed chair Janet Yellen will appear before Congress to deliver her semi-annual Monetary Policy Report.

"It's huge." That's how one strategist put it this morning, in a CNBC interview about the importance of Yellen's testimony.

Why are all eyes on Yellen? Maybe because by now, almost everyone has forgotten how powerless the Fed appeared in 2007-2009, when none of its measures could stop the financial crisis. Despite the recent market chaos, six years of rising stock prices reaffirmed the notion that the Fed can move mountains. "As the Fed goes, so do the markets" is the current mantra -- so, on Wednesday and Thursday, analysts will be listening carefully: Will Yellen mention the ongoing market turmoil? Continue reading "Can The Fed Drop Interest Rates Below 0%?" →

Are Investors Secretly Turning Bearish On The Dollar?

Posted on by Lior Alkalay

Lior Alkalay - INO.com Contributor - Forex


Less than two weeks into 2016 and history has already been made. This January will go down in the record books as Wall Street’s worst in decades. China is losing control, the Middle East is boiling over and the Emerging Markets are in dire straits. All of which has led stocks to shed more than a trillion dollars in value.

It’s the classic boiling-to-the-brim pot which suggests we’re ready to push the dollar higher, right? Instead, dollar strength has really been rather tame which, on the face of it, is quite puzzling. That is unless investors have secretly been turning bearish on the greenback. The question is, are they? Continue reading "Are Investors Secretly Turning Bearish On The Dollar?" →