Posts Tagged ‘Bollard’

Notes From Underground: I’M BERNANKE THE SAILOR MAN (OR WHAT HAPPENS WHEN FED CREDIBILITY BECOMES UNMOORED)

April 27, 2011

First things first. The FED released its FOMC statement at 11:30 a.m. CST and, as expected, there was no change in the FED‘s policy and the “extended period” language remained as did the use of “transitory” to describe the recent run up in fuel and food costs. The markets initially showed little reaction as the “big event” was to be 90 minutes later. In fact, the U.S. DOLLAR actually remained a little bid and the precious METALS were on the offer as it appeared the market was HOPING for some strong words from the chairman of the FED. The most hyped event since Geraldo’s look into Capone’s vault, Bernanke’s press conference did nothing to assuage the fears that the FED was losing its credibility. The more Bernanke talked, the more GOLD and SILVER rallied and the harder the DOLLAR dropped.

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Notes From Underground: As the dealers in Las Vegas ask, INSURANCE ANYONE?

March 9, 2011

The RBNZ cut the OVERNIGHT CASH RATE by the expected 50 basis points, although I was very doubtful. Governor Bollard made it clear that the BANK was taking out an insurance policy for the economy until a better assessment can be made about the real impact the earthquake had on New Zealand economic activity. Bollard made it clear that the personal pain for many New Zealanders was very deep and the RBNZ was doing its part to limit further economic dislocation.

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Notes From Underground: The peripheral nations are trying to get ahead of the inflation curve … with CAUTION

July 29, 2010

Last night, the Reserve Bank of New Zealand raised the overnight interest rates as expected from 3.00 percent from  2.75 percent. This was no surprise as the market widely had anticipated it. The move by the Central Banks of India and Israel was also expected, although the probabilities of the Israeli move were less than the others. So New Zealand raised rates and the currency was sold off, which has significantly weakened on the crosses. The market had a very negative reaction to RBNZ Chief Alan Bollard’s very cautious comments about rates going forward. With KIWI inflation running at an annualized rate of 2 percent, the RBNZ feels it is now ahead of inflation and will watch global growth and see how it effects New Zealand. Bollard expressed concern about the recent strength of the Kiwi and in his statement said:

“The New Zealand dollar has appreciated in recent weeks.This appreciation is inconsistent with the softeningin the New Zealand’s economic outlook …”

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