The Role of the U.S. In the Global Financial System

The Role of the U.S. In the Global Financial System

photo: ctj71081 The mandate of the Federal Reserve is clear: “…promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.” How to achieve those goals, of course, has been the subject of great debate: should the central bank use interest rates or monetary aggregates? should it rely on rules or discretion? The ongoing controversy […]

The Year 2016 Requires Tough Decisions in Nigeria

The Year 2016 Requires Tough Decisions in Nigeria

photo: Nicolas Raymond After the plunge of the commodity prices, the US Fed’s rate hikes are paving way for dimmed prospects in many emerging economies. Nigeria is not an exception. Recently, the US Federal Reserve raised interest rates by 25 basis points, taking the first step away from its near-zero interest rate policy. Advanced economies are […]

US Fed Rate Hike Will Test Emerging Markets

US Fed Rate Hike Will Test Emerging Markets

photo: Future Atlas In the multipolar world economy, the Fed’s unilateral actions contribute to diminishing global growth prospects. The US Federal Reserve raised interest rates by 25 basis points last week, taking the first step away from its near-zero interest rate policy. Led by its chairman Janet Yellen, the Fed sought to defuse market tensions by […]

Fed Rate Hike Bad Timing for Crude Oil

The Federal Reserve is about to raise interest rates for the first time in almost ten years and it couldn’t come at a worse time for the oil and gas industry. On the one hand, the oil boom was fueled by loose money from the Fed. With near-zero interest rates, money flowed into capital-intensive shale […]

We Have Lift-Off

We Have Lift-Off

The Federal Reserve delivered a hawkish hike. The dot plot reflects expectations for four rate hikes in 2016. There were no dissents. This is important. It underscores the decisiveness of the decision. There have been three voting Fed members that were thought to be likely dissents. The Fed will also continue to reinvest maturing securities […]

Premature Fed Hikes Could Cause Global Collateral Damage

Premature Fed Hikes Could Cause Global Collateral Damage

photo: flickr US October jobs report was stronger than expected. It may trigger a premature rate hike. AFTER 271,000 were jobs added in October, US unemployment rate fell to 5.0 percent. Meanwhile, average annual hourly earnings climbed by the most since 2009. As a result, the dollar strengthened and treasuries plunged. The report was seen […]

Janet Yellen’s Quiet Revolution

Janet Yellen’s Quiet Revolution

Donald Trump turned his rhetorical bazooka on Janet Yellen this week, accusing the Fed chair of being “highly political” and merely doing President Barack Obama’s bidding by declining to raise interest rates. In this as in so many things he says, Trump was issuing wisdom from his rear end, but the GOP candidate from clowntown […]

US Fed: It Is Not “The When”, It Is How Long It Will Take to Normalize Policy

Key takeaway – On September 16-17, the US Federal Reserve (Fed) will take a difficult decision: to hike rates for the first time in nearly a decade – or wait. It is a close call: US domestic economic conditions could justify tighter policy but remain fragile. While the GDP is growing, inflation is below the […]

China, US Should Transcend Economic Fears

What Washington and Beijing need today is not fear about their real or perceived vulnerabilities, but confidence about their respective strengths and joint opportunities. In his inaugural address of 1933, Franklin D. Roosevelt famously said that, “the only thing we have to fear is fear itself”. Those words provide guidance to the upcoming summit between […]

Helicopter Money, Central Bank Independence and the Unlearned Lesson From the Crisis

Macro policy coordination post crisis[1] The Great Recession has offered an important opportunity to discuss if and under what circumstances central banks might be required to coordinate their acts with governments in view of achieving specific macroeconomic objectives, such as fighting deflation and overcoming economic depression. Yet central bank independence has become such a strong […]

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