Central banks around the world are surprising markets with aggressive rate cuts: Here’s why

The Reserve Bank of Australia, meanwhile, held rates at a record low following cuts in June and July. Central banks in New Zealand, India and Thailand all announced larger-than-expected cuts to interest rates on Wednesday, furthering a global trend of monetary policy easing. The main takeaway from the raft of monetary policy easing points to central banks signaling major concerns about the outlook for economic growth, and resorting to sharp monetary policy action in order to stave off a downturn


The Reserve Bank of Australia, meanwhile, held rates at a record low following cuts in June and July. Central banks in New Zealand, India and Thailand all announced larger-than-expected cuts to interest rates on Wednesday, furthering a global trend of monetary policy easing. The main takeaway from the raft of monetary policy easing points to central banks signaling major concerns about the outlook for economic growth, and resorting to sharp monetary policy action in order to stave off a downturn
Central banks around the world are surprising markets with aggressive rate cuts: Here’s why Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-07  Authors: elliot smith
Keywords: news, cnbc, companies, banks, rates, policy, reserve, markets, heres, cuts, monetary, low, bank, aggressive, surprising, cut, rate, central, world


Central banks around the world are surprising markets with aggressive rate cuts: Here's why

The Reserve Bank of New Zealand (RBNZ) stunned markets with a 50 basis point cut , twice the expected level, to take its official cash rate to an all-time low of 1%. The Reserve Bank of Australia, meanwhile, held rates at a record low following cuts in June and July.

The Reserve Bank of India cut rates by 35 basis points for a fourth straight meeting this year, while the Bank of Thailand unexpectedly cut its rate by 25 basis points for the first time since 2015.

Central banks in New Zealand, India and Thailand all announced larger-than-expected cuts to interest rates on Wednesday, furthering a global trend of monetary policy easing.

The main takeaway from the raft of monetary policy easing points to central banks signaling major concerns about the outlook for economic growth, and resorting to sharp monetary policy action in order to stave off a downturn. Central banks often resort to lower interest rates in environments like this in order to boost money supply in the economy, stoke demand and provide an impetus to growth.

Rabbani Wahhab, senior fixed income portfolio manager at London & Capital, told CNBC on Wednesday that the timing and size of the rate cuts from New Zealand, Thailand and India sends out a clear message to their respective economies and the rest of the world.

He further pointed out that the central banks are of the opinion that “it’s not just the large economic blocs such as the U.S. and the euro zone that need easier monetary conditions, but other economies which are part of the global machine.”

The key drivers for monetary policy loosening from central bankers are softening domestic outlooks, falling annual growth rates and expectations, low inflation and weakening business and consumer confidence.

Global long-term interest rates have declined to historically low levels to accommodate this, with the European Central Bank (ECB) citing these concerns as it hinted at a potential rate cut later this year, along with the U.S. Federal Reserve, which last month announced its first cut since the 2008 financial crisis. The regional headwinds are compounded at the moment, however, by the risks to global growth arising from the ongoing trade war between the U.S. and China.

“The common worry among global central bankers is disinflation, which in itself is often a precursor to slowing economic activity. This is the reason why we are likely to see more central banks move over the course of the next few weeks,” Wahhab said.


Company: cnbc, Activity: cnbc, Date: 2019-08-07  Authors: elliot smith
Keywords: news, cnbc, companies, banks, rates, policy, reserve, markets, heres, cuts, monetary, low, bank, aggressive, surprising, cut, rate, central, world


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Dow futures marginally lower after Fed cools expectations of further rate cuts

U.S. stock index futures were lower Thursday morning, after the Federal Reserve dampened hopes of a lengthy easing cycle following a 25-basis-point rate cut. ET, Dow futures dipped 36 points, indicating a negative open of more than 12 points. In a series of posts on Twitter, President Donald Trump said Powell had “let us down ” by not clearly signalling more rate cuts. The Federal Reserve operates independently of the White House. During a press conference, Powell said the central bank would nev


U.S. stock index futures were lower Thursday morning, after the Federal Reserve dampened hopes of a lengthy easing cycle following a 25-basis-point rate cut. ET, Dow futures dipped 36 points, indicating a negative open of more than 12 points. In a series of posts on Twitter, President Donald Trump said Powell had “let us down ” by not clearly signalling more rate cuts. The Federal Reserve operates independently of the White House. During a press conference, Powell said the central bank would nev
Dow futures marginally lower after Fed cools expectations of further rate cuts Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-01  Authors: sam meredith
Keywords: news, cnbc, companies, lower, points, following, futures, cuts, central, dow, fed, rate, reserve, powell, federal, open, cools, marginally, rates, expectations


Dow futures marginally lower after Fed cools expectations of further rate cuts

U.S. stock index futures were lower Thursday morning, after the Federal Reserve dampened hopes of a lengthy easing cycle following a 25-basis-point rate cut.

At around 03:00 a.m. ET, Dow futures dipped 36 points, indicating a negative open of more than 12 points. Futures on the S&P and Nasdaq were slightly lower.

The U.S. central bank cut interest rates for the first time in more than a decade on Wednesday, citing “global developments” along with “muted inflation” as reasons for easing monetary conditions.

However, Chairman Jerome Powell told reporters in a news conference following the Federal Open Market Committee’s rate decision that the central bank’s rate cut was a “midcycle adjustment,” hinting that further rate cuts later this year were not a sure thing.

In a series of posts on Twitter, President Donald Trump said Powell had “let us down ” by not clearly signalling more rate cuts.

The Federal Reserve operates independently of the White House. During a press conference, Powell said the central bank would never move rates because of political factors or to prove its independence.


Company: cnbc, Activity: cnbc, Date: 2019-08-01  Authors: sam meredith
Keywords: news, cnbc, companies, lower, points, following, futures, cuts, central, dow, fed, rate, reserve, powell, federal, open, cools, marginally, rates, expectations


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Similar ‘adjustments’ by the Federal Reserve in the 1990s led to boom times for stocks

Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, D.C., on Wednesday, July 31, 2019. Two words from Federal Reserve Chairman Jerome Powell — “midcycle adjustment” — may have briefly roiled financial markets, but the last two times the central bank adjusted its policy, the markets did just fine. A CNBC analysis using Kensho, a hedge fund analytics tool, found that major stock averages skyroc


Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, D.C., on Wednesday, July 31, 2019. Two words from Federal Reserve Chairman Jerome Powell — “midcycle adjustment” — may have briefly roiled financial markets, but the last two times the central bank adjusted its policy, the markets did just fine. A CNBC analysis using Kensho, a hedge fund analytics tool, found that major stock averages skyroc
Similar ‘adjustments’ by the Federal Reserve in the 1990s led to boom times for stocks Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-01  Authors: yun li
Keywords: news, cnbc, companies, federal, risks, adjustments, sp, led, 1990s, rates, cuts, 1998, boom, similar, fed, reserve, times, midcycle, stocks


Similar 'adjustments' by the Federal Reserve in the 1990s led to boom times for stocks

Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, D.C., on Wednesday, July 31, 2019.

Two words from Federal Reserve Chairman Jerome Powell — “midcycle adjustment” — may have briefly roiled financial markets, but the last two times the central bank adjusted its policy, the markets did just fine.

The first rate cut in more than a decade should be distinguished from “the beginning of a lengthy cutting cycle,” the Fed chief said Wednesday as stocks cratered.

The move was aimed at insuring against downside risks, including trade tensions and slowing global growth. Wall Street economists say it was reminiscent of the Fed’s insurance easing episodes in the 1990s. The cuts then managed to reignite the economy and drive the S&P 500 more than 20% higher within a year after the first move, CNBC analysis found.

In 1995-1996 and 1998, the Alan Greenspan-led Fed slashed rates three times, a total of 75 basis points, during both periods to combat an economic downturn and successfully prolong the expansion that ended up being the second longest in history. Those rate cuts were used as insurance against risks stemming from Mexican and Russian defaults and the collapse of hedge fund Long-Term Capital Management.

A CNBC analysis using Kensho, a hedge fund analytics tool, found that major stock averages skyrocketed following the start of the midcycle adjustments in the 1990s. The S&P 500 and the Dow Jones Industrial Average surged 20.5% and 23.5%, respectively, on average one year after the first cuts. The tech-heavy Nasdaq Composite soared a whopping 39%.

Safe haven Treasurys sold off in the meantime, with futures on the 10-year note losing more than 6% in the one year after the first cuts in 1995 and 1998. Gold performance was flat back then, whereas the greenback rose more than 5% on average.

“After other ‘midcycle adjustments,’ presumably referencing 1995 and 1998, the Fed was actually able to subsequently raise rates,” Matthew Luzzetti, Deutsche Bank’s chief U.S. economist said in a note. “[Powell’s] point was more that such ‘adjustments’ have the potential to put the economy on a firmer footing, perhaps warranting higher rates in the future.”


Company: cnbc, Activity: cnbc, Date: 2019-08-01  Authors: yun li
Keywords: news, cnbc, companies, federal, risks, adjustments, sp, led, 1990s, rates, cuts, 1998, boom, similar, fed, reserve, times, midcycle, stocks


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Additional rate cut may be necessary if US-China trade war persists, former top Fed official says

An additional interest rate cut may be necessary if the ongoing trade war between the U.S. and China persists, former top Federal Reserve official Donald Kohn told CNBC on Thursday. A day before, the Fed, as expected, cut rates for the first time in more than a decade. Fed Chairman Jerome Powell later suggested that trade tensions influenced the decision on rates. Kohn, who was vice chairman between 2006 and 2010, agreed with the Fed’s decision to cut rates. As of Thursday evening, the market se


An additional interest rate cut may be necessary if the ongoing trade war between the U.S. and China persists, former top Federal Reserve official Donald Kohn told CNBC on Thursday. A day before, the Fed, as expected, cut rates for the first time in more than a decade. Fed Chairman Jerome Powell later suggested that trade tensions influenced the decision on rates. Kohn, who was vice chairman between 2006 and 2010, agreed with the Fed’s decision to cut rates. As of Thursday evening, the market se
Additional rate cut may be necessary if US-China trade war persists, former top Fed official says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-01  Authors: berkeley lovelace jr
Keywords: news, cnbc, companies, official, kohn, uschina, cut, trade, chairman, rates, interest, necessary, reserve, war, additional, vice, persists, fed, rate


Additional rate cut may be necessary if US-China trade war persists, former top Fed official says

An additional interest rate cut may be necessary if the ongoing trade war between the U.S. and China persists, former top Federal Reserve official Donald Kohn told CNBC on Thursday.

The rate cut would act as a sort-of “cushion” for the U.S. economy as the trade dispute weighs on business and consumer confidence, the former vice chairman of the Federal Reserve Board said in a interview with “Closing Bell. ”

U.S. stocks closed sharply lower Thursday after President Donald Trump said the U.S. would impose 10% tariff on another $300 billion worth of Chinese goods, effective Sept. 1. Trump’s announcement, made via Twitter, ratcheted up a trade fight that has carried on for more than year and a half.

A day before, the Fed, as expected, cut rates for the first time in more than a decade. Fed Chairman Jerome Powell later suggested that trade tensions influenced the decision on rates.

Kohn, who was vice chairman between 2006 and 2010, agreed with the Fed’s decision to cut rates. Kohn said Thursday that as a central bank official, he believed part of his responsibility was to provide the U.S. economy “some cushion and offsets” to “shocks that came from other places.”

“In a situation like this, it seemed to me there was very little cost to lowering interest rates,” said Kohn, who is now a senior fellow at the Brookings Institution.

As of Thursday evening, the market sees an 81% probability that there will be a rate cut at the Fed’s September meeting, according to the CME FedWatch tool.


Company: cnbc, Activity: cnbc, Date: 2019-08-01  Authors: berkeley lovelace jr
Keywords: news, cnbc, companies, official, kohn, uschina, cut, trade, chairman, rates, interest, necessary, reserve, war, additional, vice, persists, fed, rate


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Trump says Fed Chief Powell ‘let us down’ by not clearly signaling more rate cuts

President Donald Trump said Federal Reserve Chairman Jerome Powell “let us down” on Wednesday hours after the Fed lowered its benchmark rate by a quarter point. “As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place – no inflation,” Trump wrote. “We are winning anyway, but I am certainly not getting much help from the Federal Reserve!” The Federal Reserve operates independently of the White House. The Fed said its decisio


President Donald Trump said Federal Reserve Chairman Jerome Powell “let us down” on Wednesday hours after the Fed lowered its benchmark rate by a quarter point. “As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place – no inflation,” Trump wrote. “We are winning anyway, but I am certainly not getting much help from the Federal Reserve!” The Federal Reserve operates independently of the White House. The Fed said its decisio
Trump says Fed Chief Powell ‘let us down’ by not clearly signaling more rate cuts Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-31  Authors: tucker higgins fred imbert, tucker higgins, fred imbert
Keywords: news, cnbc, companies, rate, rates, federal, let, chief, powell, clearly, market, trump, wrote, cuts, signaling, fed, reserve, president


Trump says Fed Chief Powell 'let us down' by not clearly signaling more rate cuts

President Donald Trump said Federal Reserve Chairman Jerome Powell “let us down” on Wednesday hours after the Fed lowered its benchmark rate by a quarter point.

The rate move, the first cut in more than a decade, was widely expected. But the stock market sold off aggressively after Powell said during a news conference that the move was just a “mid-cycle adjustment,” which traders took to mean this is not the start of a longer-term easing period.

“What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world,” Trump wrote in a series of posts on Twitter.

“As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place – no inflation,” Trump wrote. “We are winning anyway, but I am certainly not getting much help from the Federal Reserve!”

Trump has pushed the central bank to pursue looser monetary policy and blasted its past decisions to hike rates.

The Federal Reserve operates independently of the White House. During a press conference Powell said the central bank would never move rates because of political factors or to prove its independence.

The Fed said its decision to lower the key interest rate despite a strong economy was motivated by fears of a potential future slowdown.

Read more: The Fed’s credibility is at stake as it looks to cut rates under pressure from a vocal president


Company: cnbc, Activity: cnbc, Date: 2019-07-31  Authors: tucker higgins fred imbert, tucker higgins, fred imbert
Keywords: news, cnbc, companies, rate, rates, federal, let, chief, powell, clearly, market, trump, wrote, cuts, signaling, fed, reserve, president


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Treasury yields move lower as traders look ahead to a Fed meeting

U.S. government debt prices were higher on Monday morning as traders wait to hear from the Federal Reserve later this week. At around 3:52 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at 2.0633% while the yield on the 30-year Treasury bond fell to 2.5812%. Traders are bracing for a potential cut in interest rates for the first time in more than a decade. The U.S. Federal Reserve meets Tuesday and will announce its latest rate decision on We


U.S. government debt prices were higher on Monday morning as traders wait to hear from the Federal Reserve later this week. At around 3:52 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at 2.0633% while the yield on the 30-year Treasury bond fell to 2.5812%. Traders are bracing for a potential cut in interest rates for the first time in more than a decade. The U.S. Federal Reserve meets Tuesday and will announce its latest rate decision on We
Treasury yields move lower as traders look ahead to a Fed meeting Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-29  Authors: silvia amaro
Keywords: news, cnbc, companies, look, lower, fed, reserve, traders, rate, prices, wait, yield, meeting, rates, yields, ahead, treasury, federal, weekat


Treasury yields move lower as traders look ahead to a Fed meeting

U.S. government debt prices were higher on Monday morning as traders wait to hear from the Federal Reserve later this week.

At around 3:52 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at 2.0633% while the yield on the 30-year Treasury bond fell to 2.5812%.

Traders are bracing for a potential cut in interest rates for the first time in more than a decade. The U.S. Federal Reserve meets Tuesday and will announce its latest rate decision on Wednesday.


Company: cnbc, Activity: cnbc, Date: 2019-07-29  Authors: silvia amaro
Keywords: news, cnbc, companies, look, lower, fed, reserve, traders, rate, prices, wait, yield, meeting, rates, yields, ahead, treasury, federal, weekat


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Lyft stock drops on news that COO is leaving

These stocks are winners when the Fed decides to start cutting…For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles. Marketsread more


These stocks are winners when the Fed decides to start cutting…For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles. Marketsread more
Lyft stock drops on news that COO is leaving Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-29  Authors: sally shin lauren feiner, sally shin, lauren feiner
Keywords: news, cnbc, companies, reserve, past, drops, looking, leaving, coo, stocks, start, lyft, sectors, stock, investors, play, rate, winners


Lyft stock drops on news that COO is leaving

These stocks are winners when the Fed decides to start cutting…

For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles.

Markets

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Company: cnbc, Activity: cnbc, Date: 2019-07-29  Authors: sally shin lauren feiner, sally shin, lauren feiner
Keywords: news, cnbc, companies, reserve, past, drops, looking, leaving, coo, stocks, start, lyft, sectors, stock, investors, play, rate, winners


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Three options strategies for the week: July 29, 2019

These stocks are winners when the Fed decides to start cutting…For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles. Marketsread more


These stocks are winners when the Fed decides to start cutting…For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles. Marketsread more
Three options strategies for the week: July 29, 2019 Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-29  Authors: tyler bailey
Keywords: news, cnbc, companies, reserve, past, looking, 2019, stocks, start, sectors, options, strategies, week, 29, investors, play, rate, winners


Three options strategies for the week: July 29, 2019

These stocks are winners when the Fed decides to start cutting…

For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles.

Markets

read more


Company: cnbc, Activity: cnbc, Date: 2019-07-29  Authors: tyler bailey
Keywords: news, cnbc, companies, reserve, past, looking, 2019, stocks, start, sectors, options, strategies, week, 29, investors, play, rate, winners


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RBC names Gilead a top biotech pick based on valuation

These stocks are winners when the Fed decides to start cutting…For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles. Marketsread more


These stocks are winners when the Fed decides to start cutting…For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles. Marketsread more
RBC names Gilead a top biotech pick based on valuation Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-29  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, based, reserve, biotech, rbc, names, past, looking, stocks, winners, gilead, start, sectors, investors, play, rate, pick, valuation


RBC names Gilead a top biotech pick based on valuation

These stocks are winners when the Fed decides to start cutting…

For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles.

Markets

read more


Company: cnbc, Activity: cnbc, Date: 2019-07-29  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, based, reserve, biotech, rbc, names, past, looking, stocks, winners, gilead, start, sectors, investors, play, rate, pick, valuation


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Goldman names Chipotle its favorite restaurant stock

These stocks are winners when the Fed decides to start cutting…For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles. Marketsread more


These stocks are winners when the Fed decides to start cutting…For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles. Marketsread more
Goldman names Chipotle its favorite restaurant stock Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-29  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, reserve, past, looking, names, goldman, favorite, stocks, start, restaurant, sectors, stock, investors, chipotle, play, rate, winners


Goldman names Chipotle its favorite restaurant stock

These stocks are winners when the Fed decides to start cutting…

For investors looking to play the anticipated rate cut, here are the sectors that have done well in the past when the Federal Reserve embarked on easing cycles.

Markets

read more


Company: cnbc, Activity: cnbc, Date: 2019-07-29  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, reserve, past, looking, names, goldman, favorite, stocks, start, restaurant, sectors, stock, investors, chipotle, play, rate, winners


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