Janet Yellen: A Monetary Policy Toolkit for the Future
Janet Yellen said at the Jackson Hole Economic Symposium that the monetary policy toolkit available prior to the Great Recession was capable of handling the situation then.
As of August 26, 2016, there weren’t too many takers of the rate hike story, at least not for September.
After stating her expectation of a rate hike, Yellen noted that robust household spending was helping US economic activity expand.
Yellen’s remarks were quite aggressive about the next rate hike, saying, “I believe the case for an increase in the federal funds rate has strengthened in recent months.”
In this series, we’ll focus on Yellen’s remarks at Jackson Hole last week and what tools the Fed had before and during the Great Recession. We’ll also see what Yellen expects in the future.
Time to revisit asset allocation The drawback is less equity sensitivity. If stocks were to surge, the alternative portfolio is likely to underperform as a third of the equity positon…
High-yield bonds provide higher yields to a portfolio. Minimum volatility stocks provide some cushion when equities fall.
Between 2003 and 2007, when the economic growth was strong, the correlation between stocks and bonds was -0.18.
Market participants were in for a rude shock when the non-farm payrolls report for May was released.
Just because global financial markets (EFA) (VEA) were not rattled as much as expected in the wake of Brexit doesn’t mean that external factors will matter less now.
The July 2016 meeting minutes showed that policymakers expect PCE inflation to remain low in the short term, primarily because of the lingering effect of the fall in crude oil prices.
Monetary policymakers are confident about US economic growth, according to the July 2016 meeting minutes.
As a group, policymakers seem utterly confused regarding their reading of the economic situation, inflation, and the labor market.
Equity markets rose after the release of the July 2016 meeting minutes on August 17, even though the minutes were relatively hawkish.
July’s FOMC meeting minutes kept a rate hike in 2016 on the table. However, there was a clear divergence among policymakers regarding the timing of the next rate hike.
There are several important economic indicators you should watch this week, including the German Ifo Business Climate Index and the Eurozone Flash Manufacturing PMI.
According to a report provided by the Federal Reserve, US industrial production increased by 0.7% in July 2016 compared to 0.4% in June 2016.
According to a report provided by the United States Bureau of Labor Statistics, the US CPI was unchanged in July 2016 compared to a 0.2% rise in June.
The Fed kept interest rates unchanged at its July 26–27, 2016, meeting but suggested that the possibility of a rate hike is quite high in the wake of stronger US labor data.
According to the EIA’s report on August 17, 2016, US crude oil inventories fell 2.5 MMbbls for the week ended August 12, 2016. That compares to an increase of 1.1 MMbbls the previous week.