Wednesday, November 27

Finance, Investing

High finance, equity markets and economic data related to it.

Fed Keeps Funds At Near Zero, Focuses on Labor Participation Rate
15Dec By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Economics

Fed Keeps Funds At Near Zero, Focuses on Labor Participation Rate

December 15, 2021--Despite high and rising inflation, the U.S. Federal Reserve decided today to keep its federal funds rate between zero and 0.25 percent. The Federal Reserve statement acknowledged that inflation has "exceeded 2 percent for some time." Furthermore, the unemployment rate is at 4.2 percent--which is significantly close to the 4 percent target that Federal Reserve Chair Jerome Powell mentioned in March. Defining Employment In his comments to reporters in a virtual conference held today, Powell seemed to expand the definition of "maximum employment" that the Fed has traditionally considered. For example, asked to define maximum employment, Powell discussed not only the unemployment rate but also "a broad range of indicators" including: the labor participation rate...
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U.S. Treasury Breaches $28.9 Trillion Debt Limit
30Nov By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Economics, Types of News: Brief

U.S. Treasury Breaches $28.9 Trillion Debt Limit

Treasury Secretary Yellen Says Uncertainty Exists Over Cash Balance On Dec. 15 November 30, 2021—The U.S. government breached its $28.9 trillion debt limit and is using extraordinary measures to borrow money to pay its bills, the Congressional Budget Office reported today. The CBO outlined the extraordinary measures the government is currently taking to stay afloat. The U.S. government has "no room to borrow under its standard operating procedures," the CBO said. If the Treasury transfers $118 billion to the Highway Trust Fund on December 15, as the recently passed Infrastructure Investment and Jobs Act directs it to do, it is likely to run out of cash. Running on Empty If the U.S. government runs out of options, it "would ultimately lead to delays of payments for some governme...
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Fed Comes Under Pressure As Inflation Persists
30Nov By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Economics, Types of News: Brief, Types of News: Videos

Fed Comes Under Pressure As Inflation Persists

Fed Chair Says Inflation Now Likely To 'Linger Well Into Next Year' November 30, 2021—After months of downplaying inflation as a temporary condition, U.S. Federal Reserve Board Chair Jerome Powell said inflation has now spread much more widely beyond the sectors impacted by supply chain bottlenecks. 'Transitory' No More "I think it's probably a good time to retire that word and explain what we mean," Powell told senators at a Banking Committee hearing. Surging Economic Growth The U.S. economy is now growing at 5 percent, which is the "fastest pace in many years," Powell said. Meanwhile, the unemployment rate is down to 4.6 percent. Asked by Sen. Jack Reed, D-R.I., about the drop in the U.S. labor participation rate, Powell said fears about the pandemic are the likely cause. ...
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Crypto Assets Grew By 200 Percent In 2021
4Nov By Patti MohrNo Comments
Cryptocurrency, Types of News: Brief

Crypto Assets Grew By 200 Percent In 2021

Ethereum Grew Tenfold Over The Last Year November 4, 2021—Cryptocurrency assets grew by roughly 200 percent, from just under $800 billion to $2.3 trillion, according to Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England. The rapid growth in the takeup of the asset is grabbing the attention of regulators around the world. "When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice," Cunliffe said, in an October speech. He added that regulators shouldn't overreact. "We should not classify new approaches as 'dangerous' simply because they are different." Institutions Are 'Just Getting Started' Meanwhile, as the assets go mainstream, some of the hold...
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Fed Decision ‘Skews Risk Toward Inflation’
3Nov By Patti MohrNo Comments
Finance, Investing, Global Economics, Types of News: Brief, United States

Fed Decision ‘Skews Risk Toward Inflation’

Despite Economic Recovery And Rising Prices, U.S. Central Bank Keeps Interest Rates Near Zero November 3, 2021—The Federal Reserve announced today it will begin reducing the amount of Treasury securities it purchases every month, in light of economic progress. However, in a move that mirrors the European Central Bank decision, the U.S. central bank is maintaining an accommodative stance on monetary policy, meaning it will continue to increase the money supply. Specifically, the committee is keeping the Federal funds rate at 0 to 0.25 percent, which is slightly above Europe's negative rates. A key point is the Fed is no longer basing the decision on the U.S. unemployment rate, which is historically low. The measure of success for the central bank now includes the labor participat...
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Cryptocurrencies Are Hot Despite The Warnings. Here’s Why.
3Nov By Jesús CedeñoNo Comments
Cryptocurrency, Types of News: Analysis

Cryptocurrencies Are Hot Despite The Warnings. Here’s Why.

Here's A Helpful Guide To Understanding Cryptos By Jesús Cedeño November 3, 2021—Just about everybody with internet access has heard about Bitcoin and cryptocurrencies these days. They may not really understand them, but they have heard of them. New Economic System Cryptocurrencies and blockchains (the technology that makes most of them work) were created to show that a new kind of economic system is possible. One where central banks, commercial banks and other traditional financial institutions are no longer in control. Investing in cryptocurrencies is a hot topic all over the world, with over $133 billion worth of crypto being traded every day and a global market capitalization that exceeds $2.6 trillion.1 However, there have been several warnings issued relating to cry...
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Congress Bides Time On Its Debt And Its Legal Limit
14Oct By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Types of News: Analysis, United States

Congress Bides Time On Its Debt And Its Legal Limit

The House approved an increase of $480 billion to the national debt limit, giving the U.S. Treasury more time to legally pay its bills. At What Point Will U.S. Debt And Deficits Break The Mighty Dollar? October 14, 2021—After much trepidation by global bankers watching lawmakers in Washington, D.C. toss responsibility of the nation's debt back-and-forth, Congress passed legislation this week giving the world's market watchers a sigh of relief. Catastrophe can wait until another day. Today, the bill became law. Specifically, Congress added $480 billion to the previous U.S. national debt limit of $22 trillion. It's estimated that provides enough cash for the U.S. Treasury to continue paying salaries of government workers and military, bills for daily operations, providing entitlemen...
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El Salvador’s Volcano-Powered Bitcoin Goes On Display
29Sep By Patti MohrNo Comments
Cryptocurrency, Types of News: Brief

El Salvador’s Volcano-Powered Bitcoin Goes On Display

September 29, 2021—Just a few weeks into its experience of using Bitcoin as its national currency, El Salvador, under the leadership of its entrepreneurial leader, is employing the use of its volcano to mine the cryptocurrency. President Nayib Bukele released a video today showing a state-owned geothermal facility on the side of El Salvador's volcano with Bitcoin mining machines. He introduced it on Twitter, saying "First steps." https://youtu.be/Y-S-oa3Rp8I The state-owned facility, LaGeo, is a subsidiary of the Comisión Ejecutiva Hidroeléctrica del Río Lempa. Bitcoin mining involves solving complex math problems with blockchain technology through high-powered computers. A study by the University of Cambridge suggests that Bitcoin mining consumes 121.36 terawatt hours ...
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‘Debt Doesn’t Matter,’ Treasury Secretary Yellen Tells Senate Committee
28Sep By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Finance, Investing, Global Economics, Types of News: Brief, United States

‘Debt Doesn’t Matter,’ Treasury Secretary Yellen Tells Senate Committee

September 28, 2021—It's been 20 years since Vice President Dick Cheney asserted to the world and the U.S. Congress that "deficits don't matter." Today, Treasury Secretary Janet Yellen asserted a similar sentiment when asked about the overall size of the debt. In an exchange with Sen. Mike Rounds, R-SD, Yellen said it is the interest cost of the debt, which is virtually zero, is all that matters. "When do we have to say, 'Enough is enough' when it comes to our deficit and our debt?" Rounds asked. Yellen responded that "there are different metrics" for looking at the level of debt. One is the debt-to-GDP ratio. "We are a little bit over 100 percent," she added, "which has traditionally been regarded as high." But rather than use that metric to examine the debt level, Yellen s...
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Fed Official Warns About Global Impact of U.S. Not Raising Debt Limit
27Sep By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Types of News: Brief

Fed Official Warns About Global Impact of U.S. Not Raising Debt Limit

September 27, 2021--As the U.S. Senate got ready to vote on a resolution to fund the government and raise the breeched debt limit, officials from the Federal Reserve warned about dire consequences that could take place if the Treasury runs out of cash. John Williams, president of the Federal Reserve Bank of New York, warned about an "extreme kind of reaction in the markets" if the U.S. Congress would raise the current debt limit. The limit of $22 trillion is well below the current debt of $28 trillion, the GER reported in July. He said the U.S. Treasury market is at the center of the global financial system. If it stops functioning due to running out of cash, the global economy will feel it. "If you actually crossed that line and got to a place where the government wasn't paying off ...
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