Posts Tagged ‘rate cut’

Notes From Underground: I Am Not Your Beast of Burden

October 29, 2019

In the global financial system, the central banks are indeed the are system’s beasts of burden. With the November FED FUNDS contract pricing in 93% chance of a rate cut, Federal Reserve Chairman Jerome Powell will attach himself to the plow and till the soil, spreading more fertilizer for equity purchases and further financial repression of creditors. As we discussed Monday, the week is filled with central bank meetings of importance and further impacted by unemployment and GDP data. But there is so much more in the political realm that we haven’t even entertained:

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Notes From Underground: We Got Our Answer

July 31, 2019

In Sunday’s blog post I asked whether the tariffs trumped U.S. economic data. Well, we got our answer on Wednesday and it’s a resounding YES. Federal Reserve Chairman Jerome Powell’s press conference Wednesday suggested that he has been sucked into the vortex of President Trump’s media manipulation of the tariff narrative. CNBC’s Steve Likesman asked whether the interest rate cut was an insurance cut instead of a DATA cut. Powell cited these reasons for the Fed’s decision: To insure against global risks /trade tensions, which is unusual as there is not much history of monetary policy responding to economic consequences of trade friction; and the cover all of the world’s largest central banks, which is the need for a faster return to inflation.

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Notes From Underground: Clearing Up Some Odds and Ends

August 1, 2016

This week brings Prime Minister Abe’s fiscal plan, the Reserve Bank of Australia’s rate decision, the Bank of England’s monetary results and U.S. nonfarm payrolls on Friday. So let’s put some perspective to tonight’s main events. The RBA will announce its overnight interest rate and consensus is calling for a 25 basis point CUT to 1.5%. Analysts believe that the weakness in the natural resource sector is aiding the reduction in capital expenditure. Also, Aussie inflation is at the bottom of the RBA‘s target range, which provides rationale for the RBA. I am not so sure of a CUT for this is coming at the end of Governor Stevens’s term at the RBA. Dr. Phillip Lowe will take over September 16 so this is the penultimate meeting for Mr. Stevens.

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