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Tag Archives: US
When Are Asset Purchases QE?
Much ballyhoo has been made about the Fed’s recent intervention in the repo market. If these actions indeed signalled a return to QE as some have alleged, this would represent a dramatic change of course and redefine the current market … Continue reading
Markets Ignore Shift in Investment Paradigm at Their Own Peril
Despite the market ructions witnessed in February, nothing seems to deter investors for long. A strong cyclical backdrop and robust earnings growth seem to forever ratify the prevailing ‘Buy the Dip’ mentality. Yet, take a step back and you can … Continue reading
What Happened in February? Is It the Start of Something New? And Where Will It All End?
Markets reacted strongly to what was possibly a fluke in the data in February. The sharp rise in volatility exaggerated the true significance of the sell-off. As the dust settles it becomes ever clearer that the “correction” was none at … Continue reading
Another Year of MOTS and FOMO?
(first published January 14) 2017 was a stellar year for asset markets: simply being long risk was sufficient to achieve strong returns. For 2018, market participants are optimistic on the back of expectations of above-trend global growth and broadly ac-commodative monetary … Continue reading
Why the Fed Balance Sheet Reduction Won’t Affect the Economy – And Why It Will
Quantitative Tightening, as envisaged by the Fed, implies an equivalent, and ultimately sizeable, reduction of bank reserves on the liability side of the Fed’s balance sheet. However, changes in monetary aggregates have little impact on the real economy or inflation. … Continue reading
Central Banks: Stopping the Addiction
As global economies recover, central banks are shifting towards ‘normalising’ their bloated balance sheets. Given the scale of the previous build-up, many investors fear that this could be hugely disruptive to markets. Yet, this is unlikely. The Fed’s balance sheet … Continue reading
Third Time Unlucky or The New Sino-American Symbiosis
The global economy is facing its third deflationary shock in succession. After the US economy and the Eurozone, China is the epicenter of the latest crisis. The erstwhile Sino-American Symbiosis resurfaces in a new, more nefarious form. The causation runs … Continue reading
A Glide Path for the Fed: Earlier, But More Predictable and Flexible Tapering
The Fed began the process of ending QE and thereby kicked off the end of a 30-year long cycle of progressively easier monetary conditions. In starting the tapering process earlier than expected, the Fed has traded off incremental adjustments in … Continue reading
Market Prospects Ahead of the QE3 Wind-Down
The Fed surprised markets with a more hawkish posture than expected, suggesting the start of QE tapering in late 2013 and completion by mid-2014. While Fed guidance may not ultimately come to pass, EM equity markets in particular remain subject … Continue reading
(Fed) Talk is cheap. So don’t listen
Recent market perceptions notwithstanding, the Fed is unlikely to end its accommodative stance (incl. QE) anytime soon. However, this does not mean that asset markets will continue to derive undiminished support from such actions forever.
Macro At Hart 