Monetary Policy

A punishing selloff in short-term debt is pushing one rate near the 'magic' level that 'frightens' markets

A punishing selloff in short-term debt is pushing one rate near the ‘magic’ level that ‘frightens’ markets

The yield on the 1-year Treasury note is testing 4%, a level that traders say could spill over into other rates and send shivers through financial markets, as the Federal Reserve presses forward in earnest with its campaign to shrink its $8.8 trillion balance sheet. That balance-sheet process, known as “quantitative tightening,” is intended to …

A punishing selloff in short-term debt is pushing one rate near the ‘magic’ level that ‘frightens’ markets Read More »

Ray Dalio says watch out for rates reaching this level, because Wall Street stocks will take a 20% hit

Ray Dalio says watch out for rates reaching this level, because Wall Street stocks will take a 20% hit

After that CPI shock earlier in the week, Wall Street is bracing for a fresh batch of data including retail sales, on Thursday, with a deepening yield curve inversion between 2- and 10-year bonds giving off ever gloomier economic signals. There’s good news though, as a disastrous rail strike may be averted. There’s no cheering …

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Meta is one of today's worst S&P 500 performers, but these 5 other stocks have lost $387 billion in value

These five stocks in the S&P 500 lost almost half a trillion dollars in value in one day amid widespread wipeout

A decline in gasoline prices couldn’t mask the problem that spooked investors on Sept. 13: Core consumer prices resumed their rapid increase during August. Fear of the Federal Reserve’s ongoing tightening of monetary policy to fight inflation sent the Dow Jones Industrial Average DJIA, -3.94% down 1,276 points (or 3.9%) to 31,104, with all 30 …

These five stocks in the S&P 500 lost almost half a trillion dollars in value in one day amid widespread wipeout Read More »

Meta is one of today's worst S&P 500 performers, but these 5 other stocks have lost $387 billion in value

Meta is one of today’s worst S&P 500 performers, but these 5 other stocks have lost $387 billion in value

A decline in gasoline prices couldn’t mask the problem that spooked investors on Sept. 13: Core consumer prices resumed their rapid increase during August. Fear of the Federal Reserve’s ongoing tightening of monetary policy to fight inflation sent the Dow Jones Industrial Average DJIA down 887 points (or 2.7%) to 31,494, with all 30 components …

Meta is one of today’s worst S&P 500 performers, but these 5 other stocks have lost $387 billion in value Read More »

U.S. inflation slows again due to cheaper gas, CPI shows. Yet prices soar for almost everything else

U.S. inflation slows again due to cheaper gas, CPI shows. Yet prices soar for almost everything else

The numbers: Falling gasoline prices last month delivered a second low U.S. inflation reading in a row as the consumer price index rose by just 0.1% in August. But the report also shows inflation has spread more broadly through the economy and is set to spur the Federal Reserve to sharply raise interest rates again. …

U.S. inflation slows again due to cheaper gas, CPI shows. Yet prices soar for almost everything else Read More »

The wild card that could sink stocks: What investors need to know as the Fed unwinds liquidity that had helped fuel market gains

The wild card that could sink stocks: What investors need to know as the Fed unwinds liquidity that had helped fuel market gains

Quantitative monetary easing is credited for juicing stock market returns and boosting other speculative asset values by flooding markets with liquidity as the Federal Reserve snapped up trillions of dollars in bonds during both the 2008 financial crisis and the 2020 coronavirus pandemic in particular. Investors and policy makers may be underestimating what happens as …

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Will the Federal Reserve kill the stock-market bounce?

Bad news for stocks: Fed will be surprised how hard rate hikes hit economy, says BlackRock

Federal Reserve policy makers are about to surprise themselves — and not in a good way when it comes to stocks and other assets perceived as risky, according to analysts at BlackRock Investment Institute. BlackRock has argued that investors are dealing with a “regime shift” as the COVID-19 pandemic upended an unusual period of mild …

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Morgan Stanley warns this corner of the credit market could be first to implode as interest rates rise

Morgan Stanley warns this corner of the credit market could be first to implode as interest rates rise

Now that Federal Reserve Chairman Jerome Powell has made it abundantly clear that the Fed has no plans to slow the pace of interest-rate hikes, some bond-market experts are warning that the most speculative areas of the credit market might be in for a rude awakening. A team at Morgan Stanley MS, -1.08% warned that …

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Shrinking the Fed's balance sheet sheet is not likely to be a benign process, new Jackson Hole study warns

Shrinking the Fed’s balance sheet sheet is not likely to be a benign process, new Jackson Hole study warns

“If the past repeats, the shrinking of the central bank’s balance sheet is not likely to be an entirely benign process and will require careful monitoring of the banking sector’s on-and off-balance sheet demandable liabilities” — Raghuram Rajan, former Governor of the Reserve Bank of India and former Chief Economist at the IMF The Federal …

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Fed chief Powell ‘did what he needed to do’ in Jackson Hole, Larry Summers says

Fed chief Powell ‘did what he needed to do’ in Jackson Hole, Larry Summers says

“ ‘The Fed is positioned as well as it can be — given the credibility losses and mistakes that there have been — with these remarks to manage things going forward.’ ” — Larry Summers Former U.S. Treasury Secretary Lawrence Summers handed out some rare praise for the Federal Reserve on Friday, saying Fed chief …

Fed chief Powell ‘did what he needed to do’ in Jackson Hole, Larry Summers says Read More »