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looking beyond borders

foreign policy and global economy

Archive for the tag “Federal Reserve”

The U.S. Federal Reserve Has A Huge Problem

The Federal Reserve’s old moniker of “lender of last resort” is no longer relevant. Its policy of holding its federal funds rate above levels seen anywhere else in the developed world and borrowing near these rates has made it the “borrower of first resort.” This is problematic.

Read Here – The National Interest

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Is Politics Getting To The Fed?

In the early 1980s, the chairman of the US Federal Reserve, Paul Volcker, was able to choke off runaway inflation because he was afforded the autonomy necessary to implement steep interest-rate hikes. Today, the Fed is clearly under unprecedented political pressure, and it is starting to show.

Read Here – Project Syndicate

The U.S. Economy Is Great, Really, For Now

Trump haters may be tempted to conclude from all this that he is about to lead America into a sudden decline, but that is not the point. This American decade started under President Obama, continued under Mr. Trump and survived congressional gridlock throughout, showing that the economy often rises above politics. The economy is driven less by ideology than by its own internal cycles, and this cycle has been turning in America’s favor for so long that it is unlikely to last much longer.

Read Here – New York Times

Trump Must Tread Carefully With His Asian Bankers

As Donald Trump angles to make America’s debt burden great again, he has some finessing to do with his bankers. No, not Russia in this case, but China and Japan, both by far the biggest holders of U.S. Treasuries with a combined $2.3 trillion. South Korea’s $95 billion stockpile also has folks in Seoul curious about President Trump adding at least $1.5 trillion of debt for giant tax cuts America doesn’t need.

Read Here – Asia Times

Welcome To The Brave New Multi-Polar World

It’s a story about the tail that wagged the dog that didn’t bark that isn’t in Kansas anymore. The dog that didn’t bark is commodity prices, and the tail that wagged is the Chinese yuan.

Read Here – Asia Times

The Battle Of Three Centuries

Twenty years ago next month, the British government gave the Bank of England the freedom to set interest rates. That decision was part of a trend that made central bankers the most powerful financial actors on the planet, not only setting rates but also buying trillions of dollars’ worth of assets, targeting exchange rates and managing the economic cycle. Although central banks have great independence now, the tide could turn again.

Read Here – The Economist

The Janet Yellen Era Starts Here

Ultimately, however, it won’t be Yellen’s P.R. skills that determine how she is remembered. It will be her economic judgment, and her confidence in the enduring strength and vigor of a revived U.S. economy.

Read Here – The New Yorker

“God Gave You Everything. And Then, He Also Gave You Delhi To Mess It All Up”

Commodities trading guru and hedge fund manager Jim Rogers has sold his holdings in Indian companies and exited India because, he says, the National Democratic Alliance (NDA) government has failed to live up to investors’ expectations.

Read Here – Mint

China Has Lots of Treasuries, Not Much Leverage

During the last U.S. presidential election, an editorial in a Chinese state-run newspaper declared that if Washington insisted on flouting Chinese interests (by selling arms to Taiwan, for example), Beijing should “use its financial weapon to teach the U.S. a lesson.” Three years later, America owes even more to China than the $1.16 trillion it owed then. But the increase in debt holdings hasn’t translated to an increase in leverage; quite the opposite, writes William Pesak.

Read Here – BloombergView

Emerging Asia Can’t Just Rely On China

If you think Federal Reserve Chair Janet Yellen is stressed, spare a thought for Agus Martowardojo. On Tuesday, the governor of Indonesia’s central bank had to choose between cutting interest rates to support growth or hiking them to prop up his currency. He ultimately decided to split the difference and do nothing. Martowardojo’s dilemma is emblematic of the increasingly chaotic situation in the world’s emerging markets.

Read Here – Bloomberg

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