Fed’s credibility tested as inflation drifts below target
With the inflation rate about half of the Federal Reserve’s 2.0 percent target, the central bank is facing a major test and some experts wonder whether it will eventually need to ramp up its already aggressive bond buying program.
Weak Demand Backdrop Stokes Worries of Disinflation
Over the past few months, the performance of U.S. economic indicators, including employment, retail sales and manufacturing, has slowed considerably from the level of activity we saw at the start of the year. This slowdown has not only heightened financial market awareness of the soft demand environment in which the U.S. economy continues to operate, but has intensified concerns over the deceleration that has been witnessed across a broad range of inflation indicators so far this year.
Here’s What A New Gold Standard Could Look Like
Just as there are many variations on democracy, there are also various–and legitimate–types of gold standards. The U.S. political system is absolutely unique. Canada’s system is a hybrid of ours and Britain’s. Britain’s is very different from that of France, which, in turn, is very different from Germany’s. And so it goes, all around the democratic world. Yet the bedrock of all of these countries’ systems is consent of the governed.
Euro’s Future – It Doesn’t Only Depend on Draghi
The U.S. Federal Reserve and the European Central Bank (ECB) are faced with opposite policy problems that will exert a greater and greater influence over the forex market in the next several months.
University endowments trim holdings in US Treasuries
Some of the smartest money in America is getting out of US government debt.
Many university endowments have scaled back their holdings of Treasury securities from as much as 30 per cent in 2008-09 to zero in some cases, say people familiar with their investment strategies.
Billionaire Batista’s Off-Book OGX Liabilities Revealed
OGX Petroleo & Gas Participacoes SA (OGXP3), which has the worst-performing bonds in emerging markets this year, holds off-balance-sheet obligations tied to its sister-company that could swell liabilities by as much as 39 percent in the event of insolvency, according to Covenant Review.
Euro to slide back after April’s ascent versus dollar: Reuters poll
The euro’s ascent in April against the dollar will not last, according to a Reuters poll of foreign exchange strategists who see the parlous state of Europe’s economies undermining the currency.
Libor scandal: Can we ever trust bankers again?
As Britain awaits a major report by the Parliamentary Commission on Banking Standards, the BBC’s Business Production team, in partnership with the Open University, asks what went wrong with the system and can we ever trust bankers again?
How To Become A Billionaire In 25 To 50 Years
I breezed through the tenth floor exhibition space at Sotheby’s, viewing auction lots for their upcoming sales of impressionist, modern and contemporary art. Anthony Grant, my cicerone, informed me that there are at least a hundred prospective buyers of iconic pieces that sell upwards of $25 million.
***SNAPSHOT – WORLD KEY OFFICIAL INTEREST RATES***
Warren’s proposal: Offer college students the same interest rates as banks
The Raw Story
Sen. Elizabeth Warren (D-MA) introduced a bill on Wednesday that would give college students the same interest rates on their federal student loans as banks do when borrowing from the Federal Reserve.
The time has come for interest rates to rise
The Seattle Times
Seattle Times columnist Bruce Ramsey says rock-bottom interest rates can’t last, and it’s a good thing.
Gulliver’s fears about interest rate increases
THE chief executive of HSBC has warned the impact of rising interest rates on British borrowers is one of the remaining challenges to the banking sector.
Americans Are Borrowing Again but Still Less Than Before Freeze
The Wall Street Journal
When the economy nose-dived several years ago, Lou Aaron found it impossible to get a bank loan, forcing him to use six different credit cards to keep his 1950s-style drive-in restaurant running.
Viewpoint: Ben Bernanke, Enabler of America’s Fiscal Dysfunction
Federal Reserve chairman Ben Bernanke doesn’t get much respect. PIMCO’s Bill Gross, who oversees some of the country’s biggest bond portfolios, has warned that Bernanke risks rousing inflationary dragons. NYU professor Nouriel Roubini, who correctly anticipated the 2008 financial crisis, has argued that Bernanke’s policies are failing to help the economy and are instead fueling a stock market bubble that will end in a financial crisis.
Dallas Fed’s Richard Fisher wants the Federal Reserve to taper its buying of mortgage-backed securities
The Dallas Morning News
The Federal Reserve’s monetary policy has not created more jobs because Congress has not provided clarity on tax policy, regulations, federal spending and other issues, Dallas Federal Reserve Bank president Richard Fisher said in an interview today on CNBC.
Markets Remain Buoyant As Records Tumble
Markets remained solid Wednesday, a day after a number of records were set as investors continued to pile into stocks following forecast-busting U.S. jobs figures. A number of the world’s major stock indexes are heading toward record levels, or were trading at all-time highs. On Wednesday, Germany’s DAX was headed for a peak, following another five-year high on Japan’s Nikkei.
Yen Teases Investors In Push Toward 100
The Wall Street Journal
Investors faced little resistance in their months-long campaign to push the Japanese currency within one yen of 100 to the dollar. Covering that last bit of ground is proving much harder.
Strong auction lifts Bunds, Portuguese yields drop
A strong auction of German five-year bonds and reassurance from the European Central Bank that it is not a “toothless tiger” lifted Bund futures off three-week lows on Wednesday.
Poland Cuts Interest Rates to Record Amid Lack of Recovery
Poland’s central bank cut its benchmark interest rate to a record low as the European Union’s largest eastern economy struggles with slowing growth.