Fed minutes reflect gradual interest rate normalization in response to high inflation risk.

Dan Rochefort

2018-02-15 07:43:00 Thu ET

Fed minutes reflect gradual interest rate normalization in response to high inflation risk. FOMC members revise up the economic projections made at the December 2017 committee forum. Many key economists and market watchers expect gradual further hawkish adjustments in U.S. monetary policy. These hawkish adjustments inevitably entail interest rate hikes that help constrain money supply growth near full employment. In effect, these gradual hawkish adjustments help better balance the inexorable and mysterious trade-off between inflation and unemployment.

As Treasury bond yields rise in response to this hawkish monetary policy stance, most major U.S. stock market indices such as Dow Jones, S&P 500, and NASDAQ decline as a result.

Several FOMC members remain cautious about high asset valuation and leverage within Corporate America. Numerous public corporations make productive use of debt and cash stockpiles with generous dividends and share repurchases. Further, excessive cash accumulation, high asset valuation, and incessant corporate debt usage breed financial contagion with minimal impact on real macro variates such as economic output, employment, and capital investment. This recent trend may or may not sustain in the long run. The resultant concern signals bouts of potential financial instability outside the financial system.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Addendum on USPTO fintech patent protection and accreditation

Andy Yeh Alpha

2023-01-11 09:26:00 Wednesday ET

Addendum on USPTO fintech patent protection and accreditation

Addendum on USPTO fintech patent protection and accreditation As of early-January 2023, the U.S. Patent and Trademark Office (USPTO) has approved our U.S

+See More

Broadcom announces its strategic plans to move its legal headquarters from Singapore to America.

Daphne Basel

2017-11-03 06:41:00 Friday ET

Broadcom announces its strategic plans to move its legal headquarters from Singapore to America.

Broadcom, a one-time division of Hewlett-Packard and now a semiconductor maker whose chips help power iPhone X, has announced its strategic plans to move it

+See More

Mario Draghi declares the ECB agreement on a thorny set of revisions to Basel 3.

Rose Prince

2017-11-25 06:34:00 Saturday ET

Mario Draghi declares the ECB agreement on a thorny set of revisions to Basel 3.

Mario Draghi, President of the European Central Bank, heads the international committee of financial supervisors and has declared their landmark agreement o

+See More

International trade, immigration, and elite-mass conflict

Jacob Miramar

2023-12-09 08:28:00 Saturday ET

International trade, immigration, and elite-mass conflict

International trade, immigration, and elite-mass conflict The elite model portrays public policy as a reflection of the interests and values of elites. I

+See More

We share Warren Buffett's famous quotes on fundamental stock investment.

Charlene Vos

2017-07-19 11:35:00 Wednesday ET

We share Warren Buffett's famous quotes on fundamental stock investment.

This brief article encapsulates the timeless wisdom of Warren Buffett's famous quotes on fundamental stock investment, fear and greed, patience, risk co

+See More

Thomas Piketty empirically shows that the top 1% cohort rakes in 20%+ of U.S. national income.

Daisy Harvey

2018-09-01 07:34:00 Saturday ET

Thomas Piketty empirically shows that the top 1% cohort rakes in 20%+ of U.S. national income.

As the French economist who studies global economic inequality in his recent book *Capital in the New Century*, Thomas Piketty co-authors with John Bates Cl

+See More