01 07 2018 | by Victor Xing | Capital Markets
All articles 192
12 04 2017 | by Victor Xing | Central Banks
Bond market term premium and wolves of Yellowstone
10 17 2017 | by Victor Xing | Capital Markets
How we learned to stop worrying and love the “fake markets”
09 20 2017 | by Victor Xing | Central Banks
QE’s distributional effects a rising political liability
04 18 2017 | by Victor Xing | Capital Markets
Persistent low volatility threatens active fund managers
02 17 2017 | by Victor Xing | Economics
Looming risks through the prism of bifurcated housing market
01 11 2017 | by Victor Xing | Economics
Financial risk contagion: China’s capital outflow
12 22 2016 | by Victor Xing | Economics
November PCE: dollar strength weighed on goods inflation
12 14 2016 | by Victor Xing | Central Banks
A less-hawkish interpretation of the December FOMC
12 02 2016 | by Victor Xing | Economics
November Payrolls and Governor Powell on risk management
12 03 2015 | by Victor Xing | Central Banks
Will the FED raise rates in December or March 2016?
Latest policy speeches from FED officials indicated that a broad range of FOMC participants (including bellwether centrists) are prepared to raise rates at the December meeting. Their readiness to act will still subject to changing economic conditions both at home and abroad. If data between now and December 15th do not deteriorate notably, then this month’s meeting is likely a “go” with rate hike.
The following risk factors may still derail the now-expected start of policy normalization (Chair Yellen expressed optimism toward these indicators at the Dec 2nd speech, and unexpected reversals would therefore diminish her confidence):
- Foreign economic risk
- Further signs of weakness in China, or indication that the People’s Bank of China is unwilling to offset the aforementioned weakness with further easing
- Further signs of European economic weakness
- Domestic economic slowdown in the form data weakness
- U.S. Bureau of Labor Statistics (BLS) will release the November Payrolls data tomorrow (Dec 4th), and this will be the final major labor market report before the December FOMC meeting
- The BLS will also release the November CPI on the day of the FOMC meeting (Dec 15th) – policymakers will have the latest realized inflation data for their deliberations
- U.S. Bureau of Labor Statistics (BLS) will release the November Payrolls data tomorrow (Dec 4th), and this will be the final major labor market report before the December FOMC meeting
- Another significant decline in energy prices, which would “push out” the path of overall inflation returning to FED’s 2% objective, measured in Personal Consumption Expenditures. If WTI drops to low 30s, it would be time to worry
Finally, recent FED speeches were released with a purpose of setting market expectations. The FOMC does not like to surprise the market on concerns that undesirable market volatility may changes the level of funding cost to unintentionally constrains economic activities. A December rate hike is currently 76% priced in, and some FED officials may think twice if this probability drops below 50%)
Next article12 02 2015 | by Victor Xing | Central Banks