Fed Loses Control Over Interest Rates

May 22 2019

Recently, the Fed decided to pause its interest rate hikes. The Fed funds rate, in this case. Better yet, the Fed decided to … lower the – from my perspective – most important policy rate! As soon as you read this article and understand why the Fed actually lowered rates, you will also understand why the Fed is losing its control over interbank interest rates.

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Olav Dirkmaat

Substantially More Jobs, Lower Unemployment and Higher Gold Prices: Odd?

May 15 2019

Last month, the number of newly created jobs in the U.S. came in far above the expected 263,000. Analysts were expecting an increase of approximately 180,000 jobs. Simply put, whenever the number of newly created jobs is higher than what the market expected, a type of Pavlovian reaction occurs in which markets expect the odds of tighter – that is, less loose – monetary policy to increase as well. Especially when investors, shortly before that, were told that economic growth also came in... »

Edin Mujagić

The ECB Is Listening to Your Concerns, But Not Really

May 8 2019

Today is Wednesday evening March 27, as I take the S8 metro in Frankfurt toward the airport. On my way, we are informed that for some unforeseen circumstance the metro is being redirected and will not stop at the airport.

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Edin Mujagić

ECB and Fed in Unison: Loose(r) Policy Here to Stay

April 24 2019

“In a dark room, you move with tiny steps. You don’t run, but you do move,” as Mario Draghi, President of the European Central Bank (ECB), describes the precarious monetary conditions in the Eurozone. A mistake, in my view, because if you’re unable to see, you inevitably get lost. Thus, if you grope in the dark, it would be wise to keep still and wait until some light enters the room or until your eyes become used to the dark.... »

Edin Mujagić

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