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

U.S. inflation has become sustainably less than the 2% policy target in recent years.

Jonah Whanau

2019-08-03 09:28:00 Saturday ET

U.S. inflation has become sustainably less than the 2% policy target in recent years.

U.S. inflation has become sustainably less than the 2% policy target in recent years. As Harvard macro economist Robert Barro indicates, U.S. inflation has

+See More

IMF chief economist Gita Gopinath predicts no global recession with key downside risks at this delicate moment.

Charlene Vos

2019-04-29 08:35:00 Monday ET

IMF chief economist Gita Gopinath predicts no global recession with key downside risks at this delicate moment.

IMF chief economist Gita Gopinath predicts no global recession with key downside risks at this delicate moment. First, trade tensions remain one of the key

+See More

Stanford computer science overlords Larry Page and Sergey Brin design Google as an Internet search company.

Charlene Vos

2020-03-05 08:28:00 Thursday ET

Stanford computer science overlords Larry Page and Sergey Brin design Google as an Internet search company.

The Stanford computer science overlords Larry Page and Sergey Brin design and develop Google as an Internet search company. Janet Lowe (2009) Google s

+See More

CNBC reports the Top 5 features of Apple's iPhone X.

Peter Prince

2017-09-13 10:35:00 Wednesday ET

CNBC reports the Top 5 features of Apple's iPhone X.

CNBC reports the Top 5 features of Apple's iPhone X. This new product release can be the rising tide that lifts all boats in Apple's upstream value

+See More

Angus Deaton analyzes the correlation between health and wealth in light of the economic origins of inequality worldwide.

James Campbell

2023-04-21 12:39:00 Friday ET

Angus Deaton analyzes the correlation between health and wealth in light of the economic origins of inequality worldwide.

Angus Deaton analyzes the correlation between health and wealth in light of the economic origins of inequality worldwide. Angus Deaton (2015)  

+See More

We share famous inspirational stock market quotes by Warren Buffett, Peter Lynch, Benjamin Graham, and several others.

Laura Hermes

2018-08-31 08:42:00 Friday ET

We share famous inspirational stock market quotes by Warren Buffett, Peter Lynch, Benjamin Graham, and several others.

We share several famous inspirational stock market quotes by Warren Buffett, Peter Lynch, Benjamin Graham, Ben Franklin, Philip Fisher, and Michael Jensen.

+See More