Wednesday, March 4, 2015

Recent China Rate cut


More fiscal drag this time its China's turn:




Continued bearish for "export currencies" imo, iow the currencies of nations/zones where we have seen a long term policy of running trade surpluses.

I still find it hard to believe the US Fed will conjure up a way to be raising rates while the ROW seems to be lowering theirs...  this is in contrast to Mike's read on this via his view of the actual recent statements of the Fed members whose statements I have to admit really do seem to be increasingly more amenable to a US rate increase.



7 comments:

NeilW said...

The US rate rise would be for ideological reasons and would demonstrate clearly that the Very Clever People approach to central banking is a complete pack of lies.

They have no more clue than the rest of us and are ruled by political allegiances and beliefs. Just like the politicians.

NeilW said...
This comment has been removed by the author.
Matt Franko said...

Neil yes that is Mike's read... many at the Fed think rates are "un-naturally low" (to them) or something along that line...

rsp,

Ryan Harris said...

Yellen says that monetary policy is extraordinary. Labor markets no onger are. Labor markets aren't perfect but they aren't extraordinary. What ever that means.

Does it really matter if short term rates are .25% vs 2%? A mortgage 5% instead of 4%? I don't think so. BioPharma and the boomtowns like San Jose will continue to chuck money at the next big thing while old folks don't have to work at Walmart to supplement social security. Houses might average 2700 square feet instead of 3000 square feet. Big deal....

Tom Hickey said...

Let's just go for and call it what it is — class interest and class power.

Matt Franko said...

Things bad in Chicagoland:

http://finance.yahoo.com/news/feds-evans-wants-no-rate-162852931.html


So you see this guy wanting lower rates for a longer time.... tough call on what these primates are going to do....

Ryan Harris said...

I'm not sure it is class and power as much as party politics and regionalism. Bernanke was a republican appointee so his central bank prioritized employment and broad measures of growth that are important to red states. He weakened the currency enough to make Chicago-land manufacturing competitive with the world and for a time slowed the decades long rot affecting the city. But Yellen is from the Chicago school of economics, came from Democrat heartland of San Fran and she thinks higher rates and a strong currency are desirable. And for her region and constituents where they primarily act as import merchants, product design, advertisers and middlemen for Asian engineering and manufacturing firms, it is good policy.