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Interest Rates

  • Featured Story

    Negative Interest Rates Would Be Another Disaster to the Economy

    By , Executive Producer, Money Morning -

    The United States is in a recession, even if we'll have to wait for official confirmation at the Bureau.

    With tens of millions of Americans out of work and many of these jobs not coming back, we're witnessing the most unprecedented economic event of our lifetimes.

    I have said before that this is my generation's greatest economic challenge.

    And by the time it is over it will fundamentally shift almost every industry in the United States.

    We will see great moves by government to raise taxes and redistribute capital.

    But those matters are largely fiscal.

    What about monetary policy?

    Right now, the U.S. central bank has moved interest rates to zero.

    The April FOMC meeting was largely dedicated to preserving the Fed's benchmark rate to a range of 0% to 0.25%.

    That said, there is a distinct possibility that interest rates could turn negative very soon in America.

    I am not among the merry band of economists who embrace negative interest rates.

    In fact, I believe they will be disastrous.

    Read more...

Article Index

Negative Interest Rates Would Be Another Disaster to the Economy

By , Executive Producer, Money Morning -

The United States is in a recession, even if we'll have to wait for official confirmation at the Bureau.

With tens of millions of Americans out of work and many of these jobs not coming back, we're witnessing the most unprecedented economic event of our lifetimes.

I have said before that this is my generation's greatest economic challenge.

And by the time it is over it will fundamentally shift almost every industry in the United States.

We will see great moves by government to raise taxes and redistribute capital.

But those matters are largely fiscal.

What about monetary policy?

Right now, the U.S. central bank has moved interest rates to zero.

The April FOMC meeting was largely dedicated to preserving the Fed's benchmark rate to a range of 0% to 0.25%.

That said, there is a distinct possibility that interest rates could turn negative very soon in America.

I am not among the merry band of economists who embrace negative interest rates.

In fact, I believe they will be disastrous.

Read more...

3 Ways to Protect Your Portfolio (and Profit) from Interest Rate Hikes

By , Money Morning -

what happens to stocks when interest rates rise

Last month, the U.S. Federal Reserve announced it would raise interest rates for a third time this year and intended to initiate a fourth raise in the near future.

The Fed's aggressive interest rate tactics rattled concerned investors who believed that regular interest rate hikes could put a sizable dent in their portfolios.

After all, it's been a long time since investors have had to worry about higher interest rates. Between 2009 and 2015, the Federal Reserve held interest rates under 0.5% in an effort to lower borrowing costs and spur economic growth.

Why I Don't Trust This Rally

By , Global Credit Strategist, Money Morning • @MichaelELewitt -

dow jones industrial average

Stocks kept rallying last week despite the fact that economic conditions are not improving anywhere in the world.

Investors predictably celebrated the European Central Bank's decision to lower interest rates further below zero and to buy more debt (including investment grade corporate bonds) in pa continuation of its desperate efforts to revive a moribund European economy.

That's bad, but it's not the immediate concern right now...

If You Want an Accurate Financial Forecast, Ask a Waiter

By , Chief Investment Strategist, Money Map Report -

financial forecast

Many investors really start to study the markets this time of year in an effort to divine what's next for global markets and, by implication, their portfolios.

But for an accurate financial forecast, I turn to the world's top steak houses, which are known haunts for global traders anxious to blow off some steam and have a fabulous meal.

Today I'm going to talk about what's not"on the menu" - pardon the pun - and why. Then, I'll highlight an investment poised for profits as a result.

Here's what waiters can tell you that economics can't.

Take Profits - Then Take Cover

By , Global Credit Strategist, Money Morning • @MichaelELewitt -

2017 market crash

Investors should not be fooled by the strong performance of stocks last week. Fundamentals have not changed and still present major headwinds to a market recovery.

Oil ended the week at $29.64 per barrel (BTI crude), which is still too low to save struggling fracking companies from the junk heap. The junk bond market backed away from 10% yields but is still a disaster zone. And major hedge funds are still nursing double digit losses.

What we saw was a classic short-covering rally inside a bear market that has further to run. Readers should not let their guards down and let themselves get fooled into diving back into dangerous waters.

If they do, they will drown.

Negative Interest Rates Mean Your Government Is Betraying You

By , Global Credit Strategist, Money Morning • @MichaelELewitt -

DJIA news

Nearly 500 million people now live in countries with official negative-interest-rate policies, and the United States may be next.

Seven years of zero interest rates have already severely punished savers; negative interest rates will finish the job by confiscating their capital for the mere privilege of depositing it in a federally licensed banking institution.

Make no mistake. NIRP is a desperate, last-ditch measure, and it couldn't come at a worse time. Here's the deal.

How the Federal Reserve's "Nuclear Option" Is Threatening Our Economic Freedom

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

The Fed

The soldiers of fortune at the U.S. Federal Reserve have devised an insidious plan to solidify their control over free markets and America.

This prescription envisions banks lending cheaply and consumers spending robustly, spurring economic growth and propping up beleaguered markets.

But the reality is quite different. Here's what's really going to happen, and how, if the Fed wins the battle it's about to wage, Americans will lose their war for economic freedom.