Is the U.S. Fed’s faster tapering too optimistic?
2 years, 11 months ago

Is the U.S. Fed’s faster tapering too optimistic?

New Indian Express  

It was the raging pandemic that was the villain. A study by Brookings explains how the Fed stepped “in with a broad array of actions to keep credit flowing to limit the economic damage from the pandemic”. Even more intractable was the legacy of bonds issued in the wake of the financial crisis of 2008, when the Fed began to adopt unconventional policies or the so-called Quantitative Easing. In 2013, when Ben Bernanke hinted that the Fed could commence tapering, it led to tantrums in some emerging markets heavily dependent on short-term capital inflows. It was after the Federal Open Market Committee meeting on 14–15 December that the Fed shifted its stance to “Inflation battle, winding down pandemic support and tapering of bonds”.

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History of this topic

Can US Federal Reserve’s revised rate cut outlook accelerate FII outflows from Indian stock market?
4 days, 11 hours ago

Can US Federal Reserve’s revised rate cut outlook accelerate FII outflows from Indian stock market?

Live Mint  

The US Federal Reserve’s recent monetary policy decisions have sparked widespread debate about their implications for global markets, including India. While this move aligns with market expectations, the Fed’s hawkish outlook for future rate cuts has raised concerns about reduced foreign inflows into Indian markets. US Fed's cautious approach hurts Indian markets Indian stock markets faced a sharp decline on …

month peak as market awaits next Fed cue
1 month ago

month peak as market awaits next Fed cue

Live Mint  

By Brigid Riley TOKYO - The U.S. dollar stuck close to a 13-month high on Friday as investors assessed the outlook for the Federal Reserve's interest rate path and uncertainty in Europe kept the euro on the back foot, while bitcoin eyed the $100,000 level. The yen, meanwhile, held its ground against the greenback after domestic core inflation figures remained …

Buckle up: Wall Street’s shaky July could be a preview for more sharp swings
4 months, 3 weeks ago

Buckle up: Wall Street’s shaky July could be a preview for more sharp swings

Associated Press  

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The Fed Thinks Time is on Its Side. That Could Get Awkward.
7 months, 3 weeks ago

The Fed Thinks Time is on Its Side. That Could Get Awkward.

Politico  

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Lessons from the US bank crisis
1 year, 8 months ago

Lessons from the US bank crisis

Hindustan Times  

Last week ended with the United States Federal Reserve raising interest rates by 25 basis points once again, taking the cumulative rate increase to 4.75 percentage points in the current cycle. Had the latest federal open market committee meeting not been preceded by two bank failures and the possibility of a crisis in many others, the rate hike would have …

Signals point to gentler Federal Reserve in 2023
1 year, 11 months ago

Signals point to gentler Federal Reserve in 2023

Associated Press  

NEW YORK — Easing inflation and a cooling job market are raising hopes on Wall Street that a gentler Federal Reserve is on the way in 2023. It will announce its next decision on interest rates Feb. 1, and investors are largely forecasting a rise of just 0.25 percentage points, down from December’s half-point hike and four 0.75 percentage-point hikes …

The US Fed faces a quandary familiar to emerging markets
2 years, 9 months ago

The US Fed faces a quandary familiar to emerging markets

Live Mint  

Judging from market price movements on Monday, the US Federal Reserve risks slipping further into a no-win interaction with capital markets that is more familiar to developing countries that lack policy credibility than to a systemically important central bank, let alone the world’s most powerful one. In a presentation to the National Association for Business Economics, Fed Chair Jerome Powell …

Fed’s Powell says it’s time to taper bond purchases, but not raise rates
3 years, 2 months ago

Fed’s Powell says it’s time to taper bond purchases, but not raise rates

Live Mint  

Federal Reserve Chair Jerome Powell said on Friday the U.S. central bank should begin reducing its asset purchases soon, but should not yet raise interest rates because employment is still too low and high inflation will likely abate next year as pressures from the COVID-19 pandemic fade. "I do think it's time to taper; I don't think it's time to …

The US Fed refuses to humour another bond market tantrum
3 years, 9 months ago

The US Fed refuses to humour another bond market tantrum

Live Mint  

The $21 trillion US Treasury market already set the narrative ahead of the Federal Reserve’s 17 March decision. Still, that wasn’t enough to move the median forecast among Fed officials on the ‘dot plot’, which still shows an expectation that the US central bank’s benchmark rate will stay near zero through 2023. Greg Jensen, co-chief investment officer of Bridgewater Associates, …

A taper tantrum around 2024 polls could be Modi govt’s biggest economic trial
3 years, 9 months ago

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Hindustan Times  

When the Indian economy contracted by 23.9% in the quarter ending June 2020—the biggest contraction among major economies—everyone feared an unprecedented economic crisis. With the Biden administration planning to give another fiscal stimulus and the federal reserve announcing that it will not increase interest rates lest the economic recovery is jeopardised, inflation could increase going forward. If the taper tantrum …

Fed’s Bostic says strong recovery could open door to bond taper this year
3 years, 11 months ago

Fed’s Bostic says strong recovery could open door to bond taper this year

Live Mint  

Federal Reserve Bank of Atlanta President Raphael Bostic said that if the economy snaps back quickly this year, the Fed may be able to start paring back its bond-buying stimulus efforts later in the year. Mr. Bostic said he is open to slowing the central bank’s $120 billion-a-month Treasury and mortgage bond buying if the economy is performing well. Mr. …

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