About the Federal Reserve [FOMC]

14 Responses

1. Sharon, on November 26, 2007 at 11:41 AM said:

   Don’t Forget Money Velocity!

   The velocity of money is the rate of circulation in the money supply. The more often money changes hands, the greater the level of commerce. The velocity of money is determined by money supply, interest rates, inflation, commerce and the Federal Reserve.

   Medical professionals, like most consumers, tend to hold less money as interest rates and inflation increase, and therefore the velocity of money increases.

   Velocity is reduced when people increase their money holdings. This occurs in periods of low interest rates and low inflation; the opposite when rates and inflation are high.

   Most domestic and health economists suspect we are entering a period of slower growth and reduced velocity.

   I see the results of money velocity and the Fed in my daily medical clinic revenue cycle management work.

   Sharon

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2. Gerald, on November 24, 2011 at 2:48 PM said:

   Why end the FEDERAL RESERVE? [Video]

   How the Banks and Government are Stealing from You [Video]

   http://www.youtube.com/watch?v=rJVJ5_4qNSo&feature=related

   These basic, hyperbolic and frightening You Tube clips are worth a look.

   Gerald

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3. Mark, on October 9, 2013 at 12:16 AM said:

   Obama to nominate Yellen as Bernanke successor

   http://money.msn.com/business-news/article.aspx?feed=AP&date=20131008&id=16979320

   First women to lead Federal Reserve.

   Mark

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4. Jared, on October 9, 2013 at 10:18 AM said:

   Janet Yellen – and the Government Shutdown

   The spectacle of political gridlock is sending an important – and undeniable – message with important investment implications.

   Unfortunately – IMHO – there’s little prospect of meaningful fiscal reform contributing to economic growth in the years ahead.

   Why? Janet Yellen, just nominated by Obama, is a drone of Benny B.

   Will she be confirmed by the House and Senate?

   http://wealthmanagement.com/strategies/real-meaning-shutdown?NL=WM-09&Issue=WM-09_20131008_WM-09_775&YM_MID=1425604&sfvc4enews=42

   Jared

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5. Chet, on October 9, 2013 at 7:29 PM said:

   Jared,

   Dr. Janet Yellen just got the nod as Fed chief. And, she will be confirmed; she is a consensus builder.

   Chet

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6. Dianne Lob, on December 24, 2013 at 10:54 PM said:

   More on the FOMC for 2014

   What Tapering Means for Bonds

   High-grade bond returns have been generally negative so far in 2013 on concerns about the looming taper and rising interest rates. The rise in bond yields means the market is already pricing in future moves by the Fed. We don’t expect negative returns to last, but we also don’t expect future bond returns to approach the outsized performance of the past, when falling rates provided a sizable tailwind.

   Taking into account the Fed’s latest information on the potential path of interest rates, we expect modestly positive returns, primarily in intermediate-term bonds, which are less rate sensitive than longer-term bonds. We think that emphasizing intermediate bonds and judicious credit selection will be critical in the period ahead.

   We believe that moving from bonds to cash would pose a substantial income penalty to investors, since the FOMC doesn’t plan to raise short-term rates anytime soon.

   What Tapering Means for Stocks

   There may be more volatility in equity markets as rates rise over time, but we don’t think that the increases will derail the equity recovery, given solid underlying company fundamentals and the improving economy. Historically, equities have done well in most periods of rising rates. Those rising-rate periods when stocksdidn’t fare well were typically accompanied by high levels of inflation. Today, inflation is low.

   We believe that the current market environment is fostering a healthy shift from higher-dividend-yielding stocks. Since talk of potential tapering began earlier this year, higher-yielding, “defensive” sectors of the market have underperformed. We expect them to continue to lag the broader market.
   
   What Tapering Means for Asset Allocation

   In this setting, we think that a modest tactical tilt to return-seeking assets, focused on globally diversified stocks, is warranted. Low levels of equity-market volatility, low interest rates, and global stock valuations that are in line with long-term averages all support this positioning.

   However, stock and interest-rate hedges on a small part of the portfolio can provide protection against sharp, adverse moves in stock and bond markets.

   Read more at http://pragcap.com/what-tapering-means-for-your-portfolio#uyouesAkOHhAFDHD.99

   Dianne Lob
   via Jason

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7. Burke, on January 7, 2014 at 12:19 AM said:

   Senate confirms Yellen as Fed Chair

   The Senate just approved Janet Yellen’s nomination to head the Federal Reserve.

   Burke

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8. Mark, on February 11, 2014 at 8:30 PM said:

   Burke

   Well, it appears as though “Mr. Market” likes Janet Yellen; at least for today.

   http://money.msn.com/business-news/article.aspx?feed=OBR&date=20140211&id=17244612

   Mark

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9. Chet, on September 10, 2014 at 6:26 PM said:

   The Fed Hates to Burst Your Bubble

   According to Jesse Eisinger Central Banks have seen the signs of market exuberance, but will the Federal Reserve move aggressively to pop the bubble?

   http://www.propublica.org/thetrade/item/the-fed-hates-to-burst-your-bubble?utm_source=et&utm_medium=email&utm_campaign=dailynewsletter

   Chet

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10. Mark, on May 18, 2015 at 3:04 PM said:

    IRs

    Many economic analysts anticipate that the Federal Reserve will announce its first hike in short-term U.S. interest rates before the end of this year. The precise timing of the long-debated move is difficult to predict, especially since the Fed has indicated that it will depend on the health of the economy.

    While earlier expectations were for an initial rate hike in June, it now seems more likely to occur during the Fed’s scheduled meetings in September or possibly December.

    Mark

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11. Michael A. Gayed CFA, on November 22, 2015 at 4:03 PM said:

    TRUMP for Fed Chair?

    Confidence is a trait that all leaders must have in order to attract people to follow them. Studies have shown that the tone of one’s voice (generally lower) and the forcefulness with which an instruction is given often results in blind following, independent of whether the actual action taken is morally good, or positive in the long-term.

    In a world of zero bound interest rates for most developed economies, the most powerful tool any central bank can use isn’t the printing press, but rather confident words. How many times have we seen stocks go down by just a few small percentage points, and then some Fed official confidently sounding positive about the direction of monetary policy? The illusion of stability is critical for bull markets to persist. That illusion is fed by the Fed itself.

    The confidence game is shared by politicians. As the media focuses heavily on both the Republican and Democratic debates, it is clear that those who gets the most attention are the ones who sound the most confident in their words, irrespective of whether what is said is factually true or not. Trump is a master at this. He has the credibility of being a strong businessman and negotiator, but more importantly when he speaks, people listen because of his unabashed confidence in himself. That confidence is what attracts people to him. That confidence is what is lacking among other candidates.

    Fed will reach its inflation targets? Get those dot plots going! Fed will raise rates? Only if stocks are rising! The degree of confidence the market has in the Fed to solve all problems is astounding. Yet, it is that confidence which is precisely what the market lives on, and which becomes a self-fulfilling prophecy which can manifest in momentum. It is remarkable how far confidence can take the markets independent of underlying fundamentals which can’t seem to sustainably improve to the degree one would expect with so much stimulus. The confidence has distorted many traditional signals used to rotate offensively and defensively in the small sample, yet defense signals historically can be quite powerful as addressed in the summary versions of our award winning papers.

    Click here to download: http://www.atacfunds.com/

    Despite all of the volatility in recent weeks, defensive sectors remain confident that the right call in the near-term is to be long equities and cyclical sectors. The indicators used in our alternative Morningstar 4 Star overall rated ATAC Inflation Rotation Fund (Ticker: ATACX, rating as of 9/30/15 among 234 Tactical Allocation Funds derived from a weighted average of the fund’s 3-year risk-adjusted return measures) remain positive, and while in the near-term we have been through a decline, the nature of these moves is that they can quickly reverse in the other direction. The false positive may indeed be the decline itself, which could serve as an opportunity to rebalance and add more to tactical strategies like ours.

    Admittedly it is hard to get people to realize that a week, a month, a year can be entirely random when it comes to market anomalies. However, market confidence ultimately comes from the fullness of time more so than the words of the moment which in the short-term create action. If Trump were Fed Chair, one can only imagine how that confidence would translate into price movement. Whether that would be justified or not wouldn’t matter in a world of performance chasing.

    Michael A. Gayed CFA

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12. Patrick Bourbon CFA, on December 17, 2015 at 11:39 AM said:

    FOMC

    An important point to make is that rising interest rates do not necessarily have a negative impact for bond investors as often perceived.

    For one thing, an increase in interest rates is accompanied by higher interest payments over time. Even though the price of a bond fund may drop in value over the short-term, higher yields/rates could eventually help bond fund investors. While bonds are not as attractive as before, they have historically provided downside protection to portfolios. Bonds help you sleep better at night.

    Another important concept is understanding how interest rates affect different asset classes (stocks, bonds…) differently and therefore, in order to hedge against rising interest rates, having a diversified portfolio becomes very important.

    So, investing in other asset classes can help an investor mitigate the impact of an increase in interest rates on bond funds.

    Patrick Bourbon CFA
    patrick@bourbonfm.com

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13. Kinsey, on November 2, 2017 at 8:23 PM said:

    Who Is Jerome Powell?

    Trump’s Pick for Fed Chairman.

    http://www.msn.com/en-us/money/markets/who-is-jerome-powell-trumps-pick-for-fed-chairman/ar-AAun0bd?li=BBnbfcN

    Kinsey

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14. Mika, on June 25, 2021 at 5:42 PM said:

    FM/FM Update 2021

    https://www.msn.com/en-us/money/markets/a-scheme-to-blow-up-the-housing-market-backfired-spectacularly-at-the-supreme-court/ar-AALp6EM

    Mika

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