At its November meeting, the U.S. Federal Reserve maintained interest rates within a 5.25% – 5.50% range. The Bank of England did likewise, keeping its key rate at 5.25% while the European Central Bank (ECB) also opted to maintain the status quo at 4.0%. Not for the first time, we are left wondering why they…
Will interest rates stay higher for longer? The rise in global bond yields suggests that’s the way investors are leaning. Central banks, having been wholly ignorant of inflationary dangers, now have a serious credibility problem with regard to getting it back under control. Their only remaining policy option is to hike interest rates which is…
Ex the United States, the global economy increasingly looks stuck in a low growth orbit and even the U.S. cannot continue deficit spending 8% of its annual gross domestic product without serious consequences. One may conclude the Federal Reserve’s hiking of interest rates from virtually zero to more than 5%, over an 18 month period,…
The Bank of England (B of E), U.S. Federal Reserve (Fed) and European Central Bank (ECB) all raised benchmark rates by 0.25% in order to tame inflation that remains substantially above target in all three territories. In the B of E’s case, it was the 14th consecutive increase, a damning indictment of its ineptitude by…
Federal Reserve (Fed) minutes from its last meeting suggested interest rates were likely to rise further in 2023 although at a slower pace. After 10 consecutive increases, June witnessed a pause in tightening. In the Eurozone, service and manufacturing output weakened while its strongest economy, Germany, entered recession. China continued to send mixed messages but…
Was it a surprise the U.S. debt ceiling was raised? Of course not; there was only going to be one ending to this theatrical stand off and Biden was always going to get his money. Of course, the real issue is when will the U.S. (and the Western world in general) get its house in…
The Bank of England raised base rate by another quarter of a point to 4.5%, representing the 12th consecutive increase and a damning indictment of its failure to conduct competent monetary policy. The 0.25% uplift emulated the actions of both the U.S. Federal Reserve and European Central Bank although their benchmark rates are now 5%…
For the second month in a row, UK CPI inflation has been worse than expected and currently stands in double digits. The Bank of England noted the path of inflation may be bumpier than expected in the short term but is likely to fall from thereon. We suspect it is correct but then, the Bank…
Eurozone inflation was slightly higher than anticipated in February but it was the increase in core inflation (excluding food and energy) that caught the eye. Now, one may conclude that food and energy, although volatile, are very much ‘core’ but leaving that argument aside, if the price of everything else is still rising (at a…
Inflation looks to be moderating but the rate increases keep coming. The Federal Reserve increased U.S. rates by 0.25% to a range of 4.5% – 4.75% while the European Central Banks and Bank of England raised by 0.5% to 2.5% and 4.0%, respectively. All still have base borrowing costs meaningfully below their present rates of…