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Interest Rates, Local interest rate discussions
early birds
post Posted: Sep 20 2021, 11:23 AM
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In Reply To: nipper's post @ Sep 18 2021, 02:34 PM

https://www.msn.com/en-au/money/topstories/...rica/ar-AAOBOIT


U.S. Treasury Secretary Janet Yellen issued a fresh plea for Congress to raise the federal debt ceiling on Sunday, arguing a default on U.S. debt would trigger a historic financial crisis.

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yep!! keep printing cool.gif



 
nipper
post Posted: Sep 18 2021, 02:34 PM
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This week, Reserve Bank of Australia governor, Phil Lowe, outlined the RBA approach to monetary policy in a world where delta is still around.

Lowe acknowledged that we have moved from a pandemic to a world where COVID19 is endemic. While he was confident that Australia will bounce back robustly, Lowe noted that there are a range of downside risks, including further lockdowns, decaying vaccine potency, new virus variants and the fact that exiting lockdown into coronavirus being endemic is very different to the experience of 2020.

This is why the RBA has prudently maintained significant monetary stimulus via its bond purchase program, which keeps downward pressure on interest rates and the Aussie dollar to provide some additional insurance against downside scenarios.

The RBA has, in fact, boosted its expected bond purchases by about 40 per cent compared to the path revealed in July, which is necessary given the current shock and the rich array of issues, known and unknown, policymakers face.

The RBA resisted its recent impulse to try to forecast the future, rather than the safer approach of nowcasting (or relying on hard data) when calibrating its stimulus.
QUOTE
In today's low inflation world, we do not want to run the risk that we increase the cash rate on the basis of a forecast that ultimately does not come to pass, leaving inflation stuck below the target band, Lowe said. We want to see actual results, not forecasted results, before we lift the cash rate.

As a commentator said, this was a dovish speech in which Lowe doubled down on highlighting that the RBA is years away from getting the wage growth required to meet its inflation target, which is why it has no plans to raise its overnight cash rate until 2024. It emphatically wants to be the last developed central bank to start unwinding its stimulus.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Sep 18 2021, 02:29 PM
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In Reply To: early birds's post @ Aug 31 2021, 10:32 AM

well, eb, that is the classical Chicago school model. Wages underpin everything, whereas with the basket of goods some can go up and some can go down. And they do.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
early birds
post Posted: Aug 31 2021, 10:32 AM
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In Reply To: nipper's post @ Aug 31 2021, 09:55 AM

until wages start rising

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ohmy.gif tongue.gif if one doing nothing and get more money from govt whom printing money day and night , you really think there is no inflation?? i kinda disagree that "wages inflation" idea!!



 
nipper
post Posted: Aug 31 2021, 09:55 AM
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In Reply To: early birds's post @ Aug 31 2021, 09:38 AM

This idea of temporary or transitory inflation seems to have bedazzled the Fed. Taper first then interest rate rises.

Is it going to lead us to ruin? Too late, the tiger out of the bag? Although I have a mate, a classically trained economist, and he reckons the inflation thing is not anything to worry about until wages start rising. So far, not a sign, though some of the union group are getting pushy, getting more assertive in their claims.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
early birds
post Posted: Aug 31 2021, 09:38 AM
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The Fed has continued to move closer to our early forecast of tapering this year, and interest rate hikes next year.

What the market liked, was that interest rates will not be occurring at the same time as tapering, and are therefore, some time off. It always amuses me, when the stock market gets excited over something not happening, that was never going to happen in the first place. Tapering comes first. Then rate hikes.

Interest rate hikes when they finally arrive, will be so far behind the inflation curve, that the economic situation will be dire.

An aggressive rate hike cycle, larger than it needed to be, awaits the United States, and likely Australia as well.

Inflation will continue to gather momentum far beyond the Federal Reserve's current expectations. The spread of Delta will only further the inflation process, while at the same time again degrading the economy.

Exactly what is being seen in Australia at the moment. In a profound way.

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it's shame, all inflation sign is on the wall now, what about all those central banks "mandate" ???????????? blush.gif

 


early birds
post Posted: Aug 19 2021, 08:54 AM
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Many Fed officials agreed the central bank could start tapering off bond-buying this year since they’ve hit their inflation goal and are closer to where they want to be on unemployment. Here’s your markets wrap.

Inflation is feeling very real for people around the world when it comes to what’s for dinner. Food prices in July were up 31% from the same month last year according to one measure.

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so it will be this year after so many dove comments by Powell , weirdsmiley.gif
i'm afraid when time Fed take action that will be little too later . sadsmiley02.gif



 
early birds
post Posted: Aug 12 2021, 09:10 AM
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As the summer feel has remained for the SPX, the bond market volatility has been the real story. With the 10 Year Yield touching 1.37% early today, it’s now nearly back to both its 50 Day MA and the SECOND key downtrend line we’ve been profiling.



2

The last close above the 50 Day MA was on 6/3 (by a hair); before that, it last finished above the popular line back on 5/19.



The pop in yields also gave some life back to its 14-Day RSI, which hit its highest point today (57) since 5/19, too. The 10 Year Yield hit 1.69% that day.



3
The 10 Year is trying to notch its sixth straight gain for the first time since seven in a row (period ending 2/8/21. That’s significant because the last two long winning streaks (January and February’21) happened as the 10 Yr was still in an uptrend. Long winning streaks typically don’t occur in a down-trending market.



4
10 Year Yield’s movement has been one of the most influential factors for equity rotation since the March’20 crash lows

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looks like indecision to me. more likely a side way market near term?? unsure.gif

 
early birds
post Posted: Aug 6 2021, 09:27 AM
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https://www.sharecafe.com.au/2021/08/05/nz-...ter-jobs-spike/

August 18 is looming as the next big date for the New Zealand economy with the country’s central bank now expected to reveal plans for a rate hike after unemployment fell sharply in the June quarter.

The rate rise would follow an ending of its quantitative easing at the last meeting in July. Additional asset purchases under the RBNZ’s Large Scale Asset Purchase program ended on July 23.

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seems NZ did better than aussies for economy last two years, as their situation looks far better than most ......

 
early birds
post Posted: Aug 2 2021, 09:21 AM
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The monthly US jobs report has been particularly volatile of late as workers remain reticent to return amidst concerns about safety and continued elevated levels of unemployment insurance. Nonetheless, traders and economists are expecting a reading in the 925K range, which would mark the strongest labor market growth in eleven months if seen. Astute readers will be watching the employment subcomponents of Monday’s ISM Manufacturing PMI report and Wednesday’s ISM Non-Manufacturing PMI report, as well as Wednesday’s ADP employment report for leading indications on whether Friday’s headline NFP report could beat expectations. Beyond the headline jobs figure, the accompanying average hourly earnings reading will also offer insight into the quality of the jobs created and potential for more inflation, with expectations currently centered on a 0.3% m/m rise.

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once a month thingy. either way will be good for the bulls i guess. wink.gif



 
 


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