Posts tagged 'Real Rates'

What’s the right rate? Or, the case for monetary policy nihilism

When it comes to central banking, we tend towards nihilism: the economy is far too complex for any policy rule, but also too complex to be understood by even the most intelligent, well-meaning technocrats. That presents an insurmountable problem for monetary policymakers, who are forever doomed to be fumbling about in the dark rather than smoothing out the vicissitudes of the cycle.

So we were intrigued to read a new paper by, among others, Goldman’s Jan Hatzius and BAML’s Ethan Harris, which was presented on Friday at the Chicago Booth Monetary Policy Forum, that basically agrees with our view. Read more

Tapering is tightening?

A funny thing has happened since the Federal Reserve announced it would begin cutting back on its bond-buying on December 18, 2013: the yield curve has flattened like a pancake.

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How low can gold go?

Gold descended through the key psychological level of $1,200 on Thursday:

This has now led a whole bunch of people getting excited about an upcoming bottom in gold, as well its prospective speedy revival.  Read more

Gold, the China connection

In the last few years China has become the single largest producer of gold.

It is also, by some measures, the second largest global consumer of the precious metal outright.

Given this, some goldbugs are befuddled as to why, despite all this Chinese buying and scenes like this…

….gold prices are still falling like this: Read more

Some key levels on the eurodollar strip

Following up on our previous post which referenced some interesting goings on in the eurodollar markets, we bring you this chart courtesy of the ICAP rates team:

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The end of RoRo, or is it?

Last week, Kit Juckes at SocGen was one of many analysts who, after looking at the latest FOMC minutes, found fit to arrive at one overriding conclusion: the era of Risk-on, Risk-off (RoRo) investing is arguably coming to an end.

As he explained… Read more