JENGA as a Financial Metaphor
Playing JENGA and watching the interest rate yield curve flatten involve similar degrees of suspense.
Interest rates
Fed raises benchmark rate to range of 1.75% – 2.0%
The last time the rate topped 2% was in late summer 2008, when the economy was contracting and the Fed was cutting rates toward zero.
America’s Exploding Budget Deficit
The U.S. should slow the cost of Social Security by raising the age threshold for receiving full benefits to 70 from 67, recommends Harvard's deficit hawk.
As the discount rate rises, so do pension funding ratios: Milliman
Milliman's forecasts for the discount rate range from a high of 4.43% by end of 2018 and 5.03% by end of 2019 to a low of 3.63% at end...
Insurers should be wary of sharp rate hike: A.M. Best
Disintermediation risk, increases in hedging costs and capital strain due to reversal of unrealized gains could strain insurers, the rating agency warned.
Allies pay for our nukes by holding US bonds, economists suggest
The countries that benefit most from American military protection are the ones who hold the biggest share of their foreign reserves in US Treasuries, which may lower our borrowing...
The Fed Reveals its Game Plan
'Given a snail’s pace of removing excessive monetary policy accommodation, it is hard to envision Fed policy threatening the economy any time soon,' a former senior economist at the...
Fed No Longer Controls Rates
'We believe the probability of the Fed raising rates three times in 2017 is less than what the market has begun to price in post the Donald Trump election,'...
Interest rate drought not over: A.M. Best
'While aggregated industry bond portfolio yields have consistently declined to 4.71% in 2015 from 4.88% in 2014 and 4.99% in 2013, strategic investment decisions have helped mitigate further declines...
No reason to raise rates now, writes heterodox economist
In the paper, 'Normalizing the Fed Funds Rate: The Fed’s Unjustified Rationale,' economist Flavia Dantas of SUNY-Cortland, claims that the U.S. job market is much softer than the official...
Trump and the Trajectory of Interest Rates
'There could be pressure for rates to go higher as investors digest the deficit spending pushed by Mr. Trump,' said Andrew McCormick, head of T. Rowe Price’s U.S. taxable...
Was that a zig (or a zag) on interest rate policy?
“I know market participants really want to know exactly what’s going to happen,” Fed chair Janet Yellen said in a speech in Philadelphia this week. “There is, as I...
The Fed’s Risky New Mandate
With the Fed deciding, yet again, to hold rates, their dilemma will only intensify this year: normalize monetary policy in line with domestic fundamentals, or cede to the pressures...
Half-a-point rise in benchmark rates now expected in 2016
“I consider it appropriate for the committee to proceed cautiously in adjusting policy,” Fed Chairwoman Janet Yellen said at the Economic Club of New York this week.
Job anemia puts interest rate hikes into doubt: TrimTabs
“The labor market is not nearly as robust as the conventional wisdom believes,” said David Santschi, chief executive officer of TrimTabs.
Fed to roll over Treasuries as they mature
'Market participants desire certainty, but in the uncertain world in which we live, that desire is not consistent with the policy that would best achieve our objectives,' said William...
Fed hike will have “no immediate impact” on insurers: A.M. Best
'Overall, a continued measured rise in rates is a net positive for the life/annuity industry as product spreads improve, investment portfolio yields increase, and other side benefits accrue to...
Fed raises target overnight rate by quarter-percent
'Were the FOMC to delay the start of policy normalization for too long, we would likely end up having to tighten policy relatively abruptly at some point,' Janet Yellen...
Waiting on the Fed
'The long end of the curve will stay stable but the front end of the curve will go up, so that we’ll have eventually have 2.5% at the short...
October rally shows markets’ addiction to low rates: OFR
“The market-implied probability of a Federal Reserve rate hike in 2015 is now down to approximately 25% to 35%," according to the Office of Financial Research. The estimate came...
