Wednesday, November 13

Currency, Debt, National Budgets & Interest Rates

‘Very Risky’ Times For Financial Markets, IMF Exec Says
8Jun By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Types of News: Brief

‘Very Risky’ Times For Financial Markets, IMF Exec Says

Fund Is Likely To Make A 'Significant' Downgrade For Global Growth Photo by Burak Kebaber on Pexels.com June 8, 2022—Less than two months after adjusting its economic forecast downward due to global fragmentation, the International Monetary Fund is poised to make another reduction when it releases its forecast next month. Moreover, the fund expects to make a "significant" downgrade for global growth, Gita Gopinath, IMF's first deputy managing director, said today. Her comments came during a conversation with the Financial Times's Martin Wolf at that paper's Global Boardroom conference. 'Very Risky' Times In contrast to an analysis by the World Bank, the IMF is not envisioning 1970s-like stagflation as a central possibility. However, negative growth rates in Europe is possibl...
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As Expected, Federal Reserve Raised Its Rate By 50 Basis Points
4May By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Economics, Types of News: Brief

As Expected, Federal Reserve Raised Its Rate By 50 Basis Points

Photo by Kelly L on Pexels.com May 4, 2022-Global financiers closely watched closely today as the U.S. Federal Reserve raised its Federal Funds rate by 0.50 percent. It marks the first large increase in the Fed rate since 2000. With a balance sheet of $9 trillion and a Fed Funds rate of 0.33 percent up until today, the U.S. Federal Reserve has consider room to maneuver to counter inflation. At the end of its two-day meeting, the Fed announced it would raise that rate to 0.75 to 1 percent. The FOMC statement made note of geopolitical events such as the Russia-Ukraine war and China's aggressive COVID-19 policy of locking down whole cities. Furthermore, the committee said it would consider a wide-range of activities before its next decision. "The Committee would be prepared to adj...
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Russia Missed Deadline To Pay $117 Million Interest On Bonds
16Mar By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Economics, Types of News: Brief

Russia Missed Deadline To Pay $117 Million Interest On Bonds

File photo 2018. Russian President Putin meets with Finance Minister Siluanov. Russian Finance Minister Orders Payment Transactions, Says It's Up To Washington To Approve It March 16, 2022--Russia missed a key deadline today to pay $117 million it owes on debt payments on two government bonds. Holders of the dollar-denominated bonds had not received a confirmation of payment at the close of business in London, according to reporting by Reuters. That kicks off a 30-day grace period lasting until April 15. If the Russian government does not make payments by then, creditors can officially declare a default on the bonds. The bonds don't come due until 2023 and 2043, but the interest payments are due now, NPR reported. Impact Of Sanctions Sanctions by a coalition of governments h...
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U.S. Central Bank Begins Long-Awaited Rate Increases
16Mar By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Types of News: Brief

U.S. Central Bank Begins Long-Awaited Rate Increases

No Curveballs Or Surprises In Fed's March Meeting March 16, 2022—For the first time in three years, the U.S. Federal Reserve raised its Fed Funds Rate. The 0.25 percent change is the minimal increase it could take. Moreover, it comes as no surprise to the public or to financial markets, That's because the Fed previously announced its plans to begin increasing rates. Since the U.S. economy emerged from the pandemic with strong growth, many analysts criticized the Fed for moving too slow to raise rates as the U.S. prices rose. As the economy reopened from the pandemic, the inflation rate increased steadily to nearly 8 percent a year. "The time for rate increases has clearly come," Fed Chair Jerome Powell said in his video meeting with reporters today. "We have to restore price stabi...
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As Sanctions Against Russia Ramp Up, US Blocks Central Bank
28Feb By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Economics, Globalization, Global Disintegration, Sanctions, Types of News: Brief

As Sanctions Against Russia Ramp Up, US Blocks Central Bank

The Russian Ruble fell Monday to its lowest level on record. February 28, 2022--The United States added Russia's central bank to its list of targeted sanctions against that country's war on Ukraine. As a result, Americans are barred from doing any business, such as purchasing bonds, with Russia's central bank. The block on the secondary market for ruble or non-ruble denominated bonds for U.S. investors goes into effect immediately. Furthermore, the U.S. Treasury imposed sanctions on Russia's National Wealth Fund, its Ministry of Finance, and the Russian Direct Investment Fund, its CEO and two of its subsidiaries. Global Sanctions in Action Banks around the world started implementing sanctions imposed not only by the United States, but also the European Union, United Kingdom, Ca...
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US Inflation Climbs Higher To 7 Percent
12Jan By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Economics

US Inflation Climbs Higher To 7 Percent

January 12, 2022--After a year of rising prices in the United States, U.S. inflation climbed even higher in December. Even with energy prices dipping down in the month, the Consumer Price Index rose 0.5 percent, bringing inflation up to 7 percent for the year. To date, the U.S. Federal Reserve has held its federal funds rate near record lows. It is currently at 0.8 percent, despite the rising consumer prices. At his confirmation hearing in the Senate Banking Committee yesterday, Federal Reserve Chairman Jerome Powell said the central bank would respond to rising inflation. ItemPrice Change (as a percent)All Items7Food6.3Food At Home6.5Food Away From Home6Energy29.3Energy Commodities48.9Gasoline49.6Fuel Oil41Energy Services10.4Electricity6.3Utility Piped Gas24.1Commodities (not inclu...
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IMF: Crypto, Stocks Surged In Response To Central Bank Policies Since 2020
11Jan By Patti MohrNo Comments
Big Tech, Digital Economy, Cryptocurrency, Currency, Debt, National Budgets & Interest Rates, Europe, EU, Eurozone, Types of News: Brief, United States

IMF: Crypto, Stocks Surged In Response To Central Bank Policies Since 2020

In Effect, The Policies Pose The Risk Of Shocks To The Financial Systems Photo by BTC Keychain January 11, 2022--Cryptocurrencies and stock market equities skyrocketed as central banks produced loose monetary policies amid the 2020 global pandemic. Although cryptocurrency prices and some high-growth stocks have dipped since the start of the year, they both "surged amid easy global financial conditions," the International Monetary Fund reported on today. That may come as no surprise among high finance investors who carefully watch interest rates established by central banks, especially those in the United States and Europe. But today's report by the IMF appears to be the first acknowledgment from the multilateral organization that government agencies are fueling the boom in r...
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Central Banks Fuel Stock Market Expansion in 2021
30Dec By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Finance, Investing, Global Economics, Types of News: Analysis

Central Banks Fuel Stock Market Expansion in 2021

Low-Interest Rate Environment Also Contributing To Rising Cost of Housing December 30, 2021--With near-zero interest rates by central banks in the United States and Europe, companies raised $12 trillion in 2021 sales of stocks, bonds, and new loans. That's up 17 percent from 2020, according to reporting by the Financial Times. Low-interest rates make borrowing easier and increase the money supply. The downside is they encourage riskier investments, benefit those who already own assets, and can skew the societal risk toward inflation. In effect, investors benefit while consumers pay more. Cash to Keep Flowing in 2022 The trend is likely to continue in 2022. Research by J.P. Morgan suggests the U.S. Federal Reserve will continue a "broadly accommodative" policy despite its tape...
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Eurozone Inflation Varies Widely By Country
28Dec By Patti MohrNo Comments
Currency, Debt, National Budgets & Interest Rates, Global Economics, Types of News: Brief

Eurozone Inflation Varies Widely By Country

As the euro-area grows, so does euro-area inflation rate. Overall, the inflation rate reached 4.9 percent by year's end. Some see the rise in prices moderating next year. While others see it persisting and posing a threat to the economic recovery. With the rise in oil prices and supply bottlenecks making global trading more expensive in 2021, consumers around the world are coping with higher prices. Central banks in Europe and the United States are beginning to reduce their stimulus programs. Yet the European Central Bank plans to continue purchasing assets, albeit at a slower pace, while maintaining its policy of zero-to-negative interest rates into 2022. What's interesting is that the inflation rate varies widely in the eurozone, from a moderate 2.2 percent annualized increase in ...
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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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