News Regulators 

Americans keep gorging on debt, thanks to the Federal Reserve

“The Federal Reserve raised official interest rates four times 2018, and investors were expecting more of the same this year” writes Brian Frank for marketwatch.com. So why did a mid-2% interest rate prompt such distress in the U.S. economy?. Given these burdensome piles of debt, even a slight increase in interest rates creates millions more in interest payments for consumers and corporations.With the Fed lowering rates, consumers took this as a cue to gorge more by borrowing as opposed to paying down loans.Consumers are increasingly financing their cars, and rising…

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News 

Switzerland’s FINMA warns of risks stemming from transitioning away from LIBOR

“FINMA has identified three specific risks in connection with the replacement of LIBOR interest rates: legal risk, valuation risk and risks in connection with operational readiness” reports financefeeds.com. Inadequate preparation for the replacement of LIBOR interest rates (envisaged by the end of 2021), including Swiss franc LIBOR, hence represents a key risk.Among the main risks, according to the regulator, are those related to the discontinuation of LIBOR. LIBOR benchmark interest rates continue to be widely used in financial instruments, FINMA notes. Source: financefeeds.com

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News Regulators 

Fed is likely to reinforce a message of continued low rates

“Powell maintains that the purchases are intended to improve the functioning of the financial system, and not to lower rates” writes The Associated Press for seattletimes.com. WASHINGTON (AP) — The Federal Reserve is expected to send a clear message when its latest policy meeting ends Wednesday: Interest rates will likely stay ultra-low for the foreseeable future.This view has freed the Fed’s policymakers to keep their benchmark short-term interest rate low. Source: seattletimes.com

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News Regulators 

When Volcker ruled the Fed, ‘people thought they’d never buy a home again’

“What Volcker did was raise the fed funds rate to levels people never thought they would see” writes Patti Domm for cnbc.com. Volcker allowed the fed funds rate, now topped out at 1.75%, to rise over 20%, and with it went the interest on home mortgages and everything else.There were farmers and business executives out in front of the Fed picketing and complaining about interest rates,” Rupkey said. Source: cnbc.com

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Markets News Stocks 

Here’s the hard-money call for why the boom in the economy and stock market will continue

“As per the charts below, current market interest rates in the U.S. have not reached rock bottom yet” writes European Markets Editor for marketwatch.com. You might think the hard-money, recession-at-every-corner crowd would be predicting an imminent reversal in the stock market given the 20% gain for the Dow Jones Industrial Average this year.The stock price for Tullow Oil TLW, -64.85%  dived by nearly 60% after the British oil and gas company cut its production outlook, which caused its chief executive to resign.The Fed is expected to leave interest rates unchanged…

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News Regulators 

As Fed reiterates rate pause, forecasts likely to be blown off course

“Fed policymakers’ forecasts for future U.S. economic growth this time around will be in sharp focus” writes Midwest Communications Inc for 95kqds.com. Last December, the Fed projected two interest rate hikes for 2019, seeing an economy only in danger of overheating.So far the interest rate cuts seem to be working.In September, policymakers’ projections for 2020 growth ranged from 1.8% to 2.1%, consistent with what the Fed sees as the economy’s potential growth rate.The Fed, however, has a spotty history with its year-ahead interest rate projections, having hit its median forecast…

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Markets News 

U.S. banks’ reluctance to lend cash may have caused repo shock: BIS

“The repo market underpins much of the U.S. financial system, helping ensure banks have liquidity to meet their daily operational needs” writes Midwest Communications Inc for 95kqds.com. The BIS also noted that the spike in the repo rate spilled over into the currency derivatives market, on which banks rely increasingly for short-term funding.The Treasury drained more than $120 billion of reserves from Aug. 14 to Sept. 17, reducing the cash buffers of the big four banks and hence their willingness to lend in the repo market, the BIS found.In a…

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News 

Amer starts second term in CBE by launching three initiatives to support industry, medium income housing

“He added that the third initiative is related to the real estate sector for medium income families” writes Hossam Mounir for dailynewssegypt.com. Tarek Amer, governor of the Central Bank of Egypt (CBE), started his second term by launching three initiatives in coordination with the government to support industry and medium income housing.According to Amer, the total loans granted to the industrial sector in Egypt amount to EGP 432bn for 182,000 industrial establishments, and that the new initiative will be a big boost for the industrial sector. Source: dailynewssegypt.com

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