Fed’s Stein suggests tapering rule to add clarity to central bank decisions September 26, 2013 Federal Reserve board member Jeremy Stein has a nifty solution to the lack of clarity over the central bank's decisions to begin tapering. That's fedspeak for reducing the rate of expansion of the monetary base. He's proposed that asset purchases be scaled back by a fixed amount for each 10 basis point drop in the [...]
US government shutdown could cause tapering confusion September 26, 2013 US Federal Reserve calculations over the beginning of tapering – a scaling back of its asset purchases program – could be hampered by fiscal squabbles over the Federal debt ceiling. Fed chairman Ben Bernanke has already referred to the lack of clarity as a hindrance on monetary policy decisions: The extent of restrictive fiscal policies [...]
Fed’s Lacker warns that forward guidance on rates may depress growth September 26, 2013 The Federal Reserve's Jeffrey Lacker has said that forward guidance may threaten economic growth – as central banks assure markets that rates will stay low, this may itself dampen expectations of future growth. In practice, he says that separating forward guidance on rates from asset purchases has proven difficult. Credibility requires consistency, over time, between [...]
London Report: Slide in energy shares helps to drive FTSE down September 25, 2013 BRITAIN’S top shares fell yesterday, led down by Carnival after a profit warning triggered downgrades, while Centrica and SSE fell after the opposition Labour Party talked of an energy price freeze. Carnival slid 6.7 per cent to 2,098.26 pence, the FTSE 100’s top faller for the second session in a row, after Tuesday’s warning of [...]
New York Report: US stocks slide for fifth day on jitters over Fed September 25, 2013 US stocks fell yesterday and the S&P 500 put in a fifth day of losses, its worst losing streak since the end of 2012, on jitters funding for the federal government would run out and after a drop in shares of the world’s largest retailer, Wal-Mart Stores. Investors worried about two looming Washington deadlines: action [...]
House sales in US pushed up by rising interest rates September 25, 2013 The number of homes bought in the US in August has jumped up 7.9 per cent to 421,000 exceeding expectations of 420,000 and a July figure of 390,000 (revised from 394,000). Despite Fed uncertainty, US residents have still bought more houses, with rising mortgage rates prompting sales. The figure still remains well below the 700,000 [...]
BlackRock study highlights pain of QE for insurers September 25, 2013 A study by asset management firm BlackRock has found that uncertainty around Quantitative Easing (QE) is "hurting insurers' income streams and driving them into riskier assets". 73 per cent of insurers say that low yields are largest driver of change for industry, whilst 80 per cent say that change is needed to produce adequate shareholder [...]
Before the open: markets remain lackluster as Fed indecision continues September 25, 2013 With the Fed's message on tapering somewhat muddled, US markets remain dulled for a fourth day, following last week's highs. This, along with the impending debt ceiling debate and potential for government shutdown over Obamacare, is also slowing down European markets, which are expected to open lower this morning. Just over half an hour to [...]
The Royal Mail should present a fair valuation for investors September 24, 2013 BUSINESS minister Michael Fallon has certainly added some missing “zip” in promoting UK industry and commerce. Despite union opposition, his infectious enthusiasm, together with Royal Mail chief executive Moya Greene’s visionary management, has given the scheduled floatation of Royal Mail in October every chance of success. Governments are notoriously bad managers of commercial enterprises, so [...]
London Report: FTSE reverses slide despite US uncertainty September 24, 2013 BRITAIN’S top share index halted a two-day slide yesterday but a selloff in cruise operator Carnival and uncertainty about the US fiscal outlook curbed investors’ appetite. Shares in Carnival fell 5.6 per cent in volume nearly four times its average for the past three months after it warned about a possible loss for the current [...]