![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
changingGot my first 213 dollar gain in a demo-account :) Think my journal will switch on mode "journal on forex-happenings" :))) Could someone advice me a site with rate-graphics on USD/EUR?
Have to improve my english, so 'll put in lj some Finantial times' articles :))
Wish you all the best take-profit ;)
Fed rhetoric catches up with reality
Published: December 15 2005 02:00 | Last updated: December 15 2005 02:00
Businesses, investors and households have got used to the notion that the path тропа, тропинка, дорожка of US interest rates is relatively predictable. One quarter point rise at each Fed meeting, no more, no less. This period of certainty, however, is drawing to a close. That is what the latest statement from the Federal Reserve means.
Not before time, the Fed has fundamentally changed the language it uses to guide the market as to its intentions. Out goes the key phrase: "Policy accommodation can be removed at a pace шаг, аллюр, поступь that is likely to be measured." This formula had been a core сердцевина, центр, ядро, суть component of Fed strategy since early 2004, when it wanted to talk down long-term interest rates to ward off отражать, парировать the risk of deflation. It was meaningful then, and in the early phase of the tightening cycle, when some feared the Fed would tighten too quickly.
But the phrase had become divorced from reality. With interest rates now at 4.25 per cent, policy is no longer obviously "accommodative". Nor is it evident that an extended series of rate rises lies ahead. The problem for the Fed was how to extricate высвобождать, высвободить itself from this formula without in effect declaring that the tightening process was over.
Its answer this week was to insert fresh language signalling at least one or two more quarter point rises early next year. This leaves the Fed still giving more guidance than seems desirable at this stage of the cycle. As Ben Bernanke, its incoming chairman, knows, this would be unnecessary if the Fed had an explicit inflation target to guide market expectations instead.
The reality is that beyond next spring the outlook for US interest rates looks quite uncertain. The US economy is still growing strongly, and has displayed astonishing resilience to shocks. Growth has averaged 4 per cent for the past two and a half years, with no quarter below 3 per cent, in spite of a doubling of oil prices, disappointing growth in big export markets, 325 basis points of Fed tightening and a run of natural disasters.
The recent fall in oil prices and post-hurricane reconstruction is likely to push growth higher in early 2006. With little spare capacity, and a shortage of available workers, core inflation will probably drift дрейфовать above 2 per cent. This argues for further rate rises. Yet the economy remains riddled изрешетить with imbalances, including unprecedentedly low household savings. Adjustment is inevitable. This could come smoothly, with rising disposable incomes shared between higher consumption and gradually increasing savings. Or it could come abruptly, with damaging consequences for growth.
Thus far, household spending has been propped up by wealth gains from housing but the housing market now appears to be cooling. The full effect of past rate rises has not yet been felt. The higher rates go, the greater the risk of a hard landing in property leading to a sharp decline in consumer spending. The flat yield curve need not necessarily signal recession but it does suggest that the bond market believes the scope размах for further rises is limited.
In short, the US economy and US monetary policy will be pulled in different directions by resilient growth and structural imbalances. Given that interest rates are now at a level considered broadly neutral, the Fed will have to respond far more directly to incoming data than it has done so far in the cycle. Decisions and investment strategies that rely on a high level of confidence about where it is headed could come badly unstuck.
Have to improve my english, so 'll put in lj some Finantial times' articles :))
Wish you all the best take-profit ;)
Fed rhetoric catches up with reality
Published: December 15 2005 02:00 | Last updated: December 15 2005 02:00
Businesses, investors and households have got used to the notion that the path тропа, тропинка, дорожка of US interest rates is relatively predictable. One quarter point rise at each Fed meeting, no more, no less. This period of certainty, however, is drawing to a close. That is what the latest statement from the Federal Reserve means.
Not before time, the Fed has fundamentally changed the language it uses to guide the market as to its intentions. Out goes the key phrase: "Policy accommodation can be removed at a pace шаг, аллюр, поступь that is likely to be measured." This formula had been a core сердцевина, центр, ядро, суть component of Fed strategy since early 2004, when it wanted to talk down long-term interest rates to ward off отражать, парировать the risk of deflation. It was meaningful then, and in the early phase of the tightening cycle, when some feared the Fed would tighten too quickly.
But the phrase had become divorced from reality. With interest rates now at 4.25 per cent, policy is no longer obviously "accommodative". Nor is it evident that an extended series of rate rises lies ahead. The problem for the Fed was how to extricate высвобождать, высвободить itself from this formula without in effect declaring that the tightening process was over.
Its answer this week was to insert fresh language signalling at least one or two more quarter point rises early next year. This leaves the Fed still giving more guidance than seems desirable at this stage of the cycle. As Ben Bernanke, its incoming chairman, knows, this would be unnecessary if the Fed had an explicit inflation target to guide market expectations instead.
The reality is that beyond next spring the outlook for US interest rates looks quite uncertain. The US economy is still growing strongly, and has displayed astonishing resilience to shocks. Growth has averaged 4 per cent for the past two and a half years, with no quarter below 3 per cent, in spite of a doubling of oil prices, disappointing growth in big export markets, 325 basis points of Fed tightening and a run of natural disasters.
The recent fall in oil prices and post-hurricane reconstruction is likely to push growth higher in early 2006. With little spare capacity, and a shortage of available workers, core inflation will probably drift дрейфовать above 2 per cent. This argues for further rate rises. Yet the economy remains riddled изрешетить with imbalances, including unprecedentedly low household savings. Adjustment is inevitable. This could come smoothly, with rising disposable incomes shared between higher consumption and gradually increasing savings. Or it could come abruptly, with damaging consequences for growth.
Thus far, household spending has been propped up by wealth gains from housing but the housing market now appears to be cooling. The full effect of past rate rises has not yet been felt. The higher rates go, the greater the risk of a hard landing in property leading to a sharp decline in consumer spending. The flat yield curve need not necessarily signal recession but it does suggest that the bond market believes the scope размах for further rises is limited.
In short, the US economy and US monetary policy will be pulled in different directions by resilient growth and structural imbalances. Given that interest rates are now at a level considered broadly neutral, the Fed will have to respond far more directly to incoming data than it has done so far in the cycle. Decisions and investment strategies that rely on a high level of confidence about where it is headed could come badly unstuck.
![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
no subject
Date: 2006-02-18 10:35 pm (UTC)no subject
Date: 2006-02-19 03:22 pm (UTC)no subject
Date: 2006-02-19 03:54 pm (UTC)no subject
Date: 2006-06-25 12:37 pm (UTC)no subject
Date: 2006-06-25 12:38 pm (UTC)no subject
Date: 2006-06-25 12:53 pm (UTC)no subject
Date: 2006-06-25 12:40 pm (UTC)www.rbc.ru
no subject
Date: 2006-06-25 12:53 pm (UTC)no subject
Date: 2006-06-25 02:04 pm (UTC)no subject
Date: 2006-06-25 02:09 pm (UTC)no subject
Date: 2006-06-25 02:13 pm (UTC)no subject
Date: 2006-06-25 02:20 pm (UTC)no subject
Date: 2006-06-25 02:26 pm (UTC)