Posts Tagged ‘Axel Weber’
February 21, 2021
Forward guidance is a key tool in the Federal Reserve’s arsenal, promoted in a speech long ago by Columbia University professor Michael Woodford at the Jackson Hole Symposium. In a previous communication, the central bank said, “Forward guidance is a tool that central banks use to provide communication to the public about the likely course of monetary policy.”
This tool allows the FED to establish a time-directed path for interest rates so that the MARKET does not suffer shocks from an upward surprise move in rates.
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Tags:Axel Weber, Federal Reserve, forward guidance, inflation, U.S. Treasuries, U.S. yield curves, yield curve control
Posted in Debt Market, Fed | 17 Comments »
October 19, 2016
President Mario Draghi takes center stage tomorrow and as usual the press conference will be critical. The ECB official announcement is at 6:45 CDT with the presser 45 minutes later. The consensus is for no change in rates or the current 80 BILLION EUROS in large-scale asset purchases. I would argue that if Mr. Draghi wishes to increase the ECB balance sheet tomorrow HE OUGHT TO INCREASE QE to at least 90 BILLION EUROS. But ought does not imply WILL. The past week has brought severe criticism of Draghi and the ECB from two of the most prominent monetary authorities in Europe. First, Gillian Tett had an article in last Friday’s Financial Times titled, “Investors Are Ill Equipped For Our Unfathomable Future.” Tett reports on the views of Axel Weber, who should have been the President of the ECB, instead of Draghi. Weber said the banking system is much stronger today than for many years. But, Axel warns that financial markets are much more unstable than the banks. Markets are not free markets “because of heavy government intervention.”
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Tags:Axel Weber, ECB, Euro, Germany, Mario Draghi, Otmar Issing, QE
Posted in ECB, Europe | 6 Comments »
June 11, 2015
Last Wednesday, ECB President Mario Draghi warned the traders and investors in sovereign debt and other credit markets that great volatility would be the cornerstone of activity and the market would have to learn to deal with it. The problem with this scenario is, I believe, that the ECB is the progenitor of most of the violent price movement. Remember, the ECB QE program means that the Frankfurt bank has a great deal of fire power to move markets–to the tune of 60 billion euros ($72 billion) a month, which was close to what the FED was purchasing at the height of its QE program. Traders and investors have no heads-up as to when the ECB will be buying and therefore subject to being stopped out of trades at any time.
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Tags:Axel Weber, Bunds, central bank, ECB, Fed, Janet Yellen, liftoff, Mario Draghi, monetary policy, QE, volatility
Posted in ECB, Fed | 15 Comments »
December 8, 2014
Three years ago I wrote a blog suggesting that Bundesbank Axel Weber should become ECB President so that the Germans felt they had control of Europe’s monetary policy. My argument was simple: If the Germans controlled the ECB then Berlin MAY BE more willing to support a QE program. As Bernard Connolly argued 20 years ago, the French hoped to gain control of European monetary, thus remove the powerful influence of the Bundesbank. The French have worried that an ECB under the influence of German monetarist restrictions would favor tight money and with it a strong EURO. France and Italy have relied on the ability to depreciate their currencies during times of stress but a Bundesbank-infused ECB would be more reticent to follow the path of least resistance and the possibility of inflation.
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Tags:Abe, Axel Weber, ECB, elections, Eur/Yen cross, Europe, Fed, France, Germany, Japan, Mario Draghi, QE, Stanley Fischer, William Dudley
Posted in BoJ, ECB, Europe, Fed | 8 Comments »
March 1, 2012
Wow! Wednesday’s market reaction to words not said was extraordinary. The LTRO went very much as expected and the selloff in the EURO was in step, but the reaction of the GOLD and SILVER to unspoken words was quite unusual. Many questions were raised as to the market reaction. The GOLD sell off is rational if the premier haven was elevated simply on the belief of further easing by the FED.
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Tags:Axel Weber, Bernanke, Bundesbank, China, Draghi, ECB, Euro, Fed, financial repression, flatten, Gold, gold/yen, Jens Weidmann, Jurgen Stark, LTRO, operation twist, QE, Sarah Raskin, silver, SOMA, U.S. Dollar, ZIRP
Posted in Debt Market, ECB, Fed, Gold | 5 Comments »
November 16, 2011
It has been the best of times. It has been the worst of times. President Sarkozy began the year with such high hopes and aspirations as he desired to raise his stature on the world stage. He won his early skirmishes against Chancellor Angela Merkel by first defeating Germany’s desire for Axel Weber to attain the ECB Presidency and then forcing the German Chancellor’s hand for a larger pool of capital for the European Financial Stability Facility. But the taste of victory has now faded as the FRENCH BOND MARKET is suffering under the weight of its deeply troubled banks and the GERMAN/FRENCH 10-YEAR BOND SPREAD CONTINUES TO WIDEN. France is deemed to be very vulnerable for its banks own so much EURO SOVEREIGN DEBT that of course is deemed to be riskless and require no haircut or capital to support it.
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Tags:Axel Weber, Bill Gross, ECB, EFSF, Eric Rosengren, Euro, euro sovereign debt, Fed, Financial Times, France, French bond market, Germany, Gold, Jean-Claude Trichet, Mario Draghi, Merkel, MF Global, Napoleon, OAT/Bund spread, PIIGS, PIMCO, Sarkozy
Posted in Debt Market, ECB, Europe, Fed | 8 Comments »
November 6, 2011
In President Obama’s G-20 press conference the mood was somewhat upbeat as he boasted that the economic powerhouses had made progress on the issues of economic growth. The President also was confident that Europe can meet it challenges as leaving Cannes, he felt that a “solid foundation has been built.” It seems that Obama failed to capture the real mood of the FAILED G-20 meeting as the Financial Times had two very morose articles about the G-20 and a solution on the European debt crisis.
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Tags:Axel Weber, EFSF, Euro, Europe, France, G-20, George Soros, German Constitutional Court, IMF, Merkel, Obama, Papandreou, Sarkozy
Posted in Europe, G-20 | 9 Comments »
June 9, 2011
It is time for the ECB president to leave the scene as he is losing the credibility that he has labored so hard to construct. Mr. Trichet delivered the widely expected phrase “STRONG VIGILANCE” in his post-ECB monetary policy press conference. The EURO made its high for the day on the utterance of the words “STRONG VIGILANCE” but sold off quickly as Trichet emphasized that the ECB does not signal a guarantee on future interest rates. The guardian of EURO monetary policy desired to keep the markets off-balance.
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Tags:Axel Weber, Clinton, ECB, EU, Euro, IMF, Iran, Lagarde, Merkel, oil, Opec, PIIGS, strong vigilance, Trichet, voluntary restructuring, World Bank
Posted in ECB, Germany | Leave a Comment »
May 11, 2011
If the prices of commodities are falling because of increased margin requirements on ENERGY and PRECIOUS METALS, WHY DOESN’T THE FED JUST ASK FOR EMERGENCY POWERS TO CONTROL MARGINS FOR ALL INVESTMENTS? Chairman Bernanke is on the record as believing that INFLATIONARY PRESSURES ARE TRANSITORY. Well, it seems that the power to make higher commodity prices transitory is to raise margins and force the speculators to disgorge their positions. The increase in MARGINS and the RESULTING LIQUIDATION WOULD ALLOW THE FED TO MAINTAIN QE POLICIES WITHOUT THE FEAR OF TRANSITORY PRICE INCREASES.
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Tags:Axel Weber, Bernanke, bonds, BRICS, central banks, Chinese, Commodities, Dollar, ECB, energy, Equities, Euro, Eurocrats, Fed, inflation, margin requirements, Mario Draghi, PPI, precious metals, real estate, retail sales, transitory, Trichet
Posted in Commodities, ECB, Europe | 4 Comments »