Tag Archives: Rate hike

Currencies, USD/JPY

USD/JPY: If the Fed postpones a rate hike, Japan’s QE expansion would also be delayed

As the Fed remains unclear about when it raises interest rates, the investors are starting to doubt the Fed’s will for a rate hike. The doller is getting weak, and the gold price rebounded.

In the global markets, we also need to note that one central bank’s policy affects another central bank’s policy, and at the moment, this is the most true with the Fed and the Bank of Japan.

The Fed’s aim

As we explained in the following article, the Fed is not waiting for the further improvement of the labour market, but we estimate its aim is the depreciation of the stock market itself:

Continue reading USD/JPY: If the Fed postpones a rate hike, Japan’s QE expansion would also be delayed →

European stock market, Japanese stock market, Market outlook, US stock market

World’s GDP & stock market comparison: southern Europe finally starts to recover, Japan sinks

As we have written, there is no large economy in the world that is growing rapidly. Reflecting the decreasing demands in the world, including the Chinese economy slowdown, the commodity markets completely collapsed, such as copper and iron ore.

However, it does not mean any single small country does not enjoy any significant growth. Thus, we review the world’s economy again to find out which area is the most profitable for investors to bet on.

Continue reading World’s GDP & stock market comparison: southern Europe finally starts to recover, Japan sinks →

Market outlook, US stock market

The Fed wants US stocks to go down to degas the QE bubble

In September, despite the market’s speculating that the Fed might raise interest rates, the Fed decided to leave rates unchanged, postponing a rate hike.

Despite our guess, it also did not particularly emphasize its intention to raise rates within the year, even though there is an obvious difference of recognition between the Fed and investors in expecting how fast the Fed is going to raise rates in the next few years.

Is the Fed intentionally leaving the gap as it is? If the answer is yes, and there is some hidden strategy behind the Fed’s attitude, it might imply what the Fed truly wants to do, and it is neither about the labour market nor the inflation. It is something else.

Continue reading The Fed wants US stocks to go down to degas the QE bubble →

News

The Fed leaves interest rates unchanged, no rate hike for September

The FOMC meeting was held on 17th of September, and the Fed decided to leave interest rates unchanged. Investors were speculating the Fed might raise interest rates in this meeting.

Richmond Fed President Jeffrey Lacker voted against this decision, insisting the Fed should raise interest rates by 0.25%.

Press conference by Federal Reserve Chair Janet Yellen is scheduled after this meeting. She is expected to explain about this decision and the Fed’s future monetary policies. For more information about the Fed’s rate hike, see the following articles:

Foreign exchange market, Market outlook, US stock market

Will the Fed raise interest rates in FOMC on 17 Sep?

On 16-17 Sep, the Fed will hold the FOMC meeting with a possibility of a rate hike for the first time since the subprime mortgage crisis. The result will be published on the 17th.

Although we have already been writing about the Fed’s rate hike, we would like to summarize our opinions here. We regard the following 2 scenarios as highly likely: Continue reading Will the Fed raise interest rates in FOMC on 17 Sep? →

History of markets

Why did Black Monday happen in 1987: Reaganomics, the Plaza Accord and the German rate hike

Throughout the last hundreds of years, the essence of the financial markets has never changed, and the investors repeatedly experience absurd financial bubbles of the common root.

This perhaps gives this article some significance, as we explain here the cause of Black Monday in 1987. Many say there was no specific reason of the market crash, or it is difficult to identify the cause, but some great investors indeed predicted the collapse in advance, as there were the definite causes of the bubble we can explain here.

Continue reading Why did Black Monday happen in 1987: Reaganomics, the Plaza Accord and the German rate hike →

Currencies, Market outlook, US stock market, USD/JPY

Correction or crash?: Worldwide stock plunge, US rate hike, commodity market crash, Chinese yuan devaluation

Our readers wouldn’t be surprised at the ongoing turmoil in the global stock markets as we’ve been warning about the decreasing liquidity and global economies’ slowdown:

However, we feel China’s currency devaluation increased investors’ worries further, so that the plunge became rapid and radical. For investors who’ve got concerned about their positions, we explain which trend in the markets is unchanged and what we can buy during the turmoil.

Continue reading Correction or crash?: Worldwide stock plunge, US rate hike, commodity market crash, Chinese yuan devaluation →

Foreign exchange market, Market outlook

Why the Fed is so hawkish and rushing to raise the interest rate

Recently, the Fed seems quite hawkish and rushing to raise the interest rate. According to Reuters, Mr Lockhart, Atlanta Fed President, insisted the point of “lift off” is close.

Although the GDP growth remains to be over 2%, the speed of the growth is weakened, and the CPI is still far from their inflation target of 2%.

This means there are other reasons for the rate hike than just the economic recovery of the country. The Fed is actually getting pushed to raise the interest rate by some other fear: the reverse flow of the portfolio rebalancing.

Continue reading Why the Fed is so hawkish and rushing to raise the interest rate →