There have been increasing concerns about the fate of United States' prized triple-A sovereign debt rating. While Standard and Poor's recently downgraded its U.S. debt outlook to negative from stable, implying that a ratings cut could happen in two years, one independent ratings agency has given the U.S. sovereign rating a "C".
The world’s central banks are all considering whether it is time to end the ultra-loose monetary policies that have helped the global economy recover from the financial crisis but one strategist believes the tighter monetary policy can only lead to recession, and a severe recession at that.
When Ben Bernanke goes before reporters in his first live press conference next week, there’s one question I guarantee he won’t answer: When will you start raising interest rates again?
[[wysiwyg_imageupload:2112:]]By Axel Merk
Today, the European Central Bank (ECB) raised its main refinancing rate by 0.25% to 1.25%.
ECB President Trichet has long argued that its monetary policy is independent of the "extraordinary measures" put in place to support the financial system. However, it was only earlier this year that the market took Trichet's suggestions that he may raise rates seriously, even as the sovereign debt crisis remains unresolved.
Are the inflation hawks about to treat us to a round of $4 gasoline?
Forrest Yeager, a 91-year-old resident of this seaside community, had been counting on his retirement savings to last until he died. The odds are moving against him. - Low interest rates punish savers.-Slash
Even as the European Union moves this week to finalize its permanent financial rescue fund for struggling member nations, rumors that a government-controlled Irish bank would miss a bond payment stoked fresh fears in European debt markets Tuesday.
As Congress begins debating the future of Fannie Mae and Freddie Mac, proponents of keeping the taxpayer on the hook for the mortgage market argue that without such support the 30-year fixed-rate mortgage would disappear. The advantages of the 30-year mortgage have, however, been grossly exaggerated. Subsidizing it should not serve as an excuse for continuing to put the taxpayer at significant risk.
[[wysiwyg_imageupload:1887:]]By Levente Mady
The bond market traded with a bullish tone early in the week, but could not break through resistance. As a result it settled back into the middle of the recent trading range and looks content to continue to chop sideways. The roaring commodity markets have certainly had a muted impact on bonds as the market appears to believe Ben Bernanke’s remarks that the upheaval in oil, silver, cotton, etc. should be just a temporary blip. Last I checked, the Fed had a less than perfect track record predicting market impacts. I am not sure if we should expect a higher success rate this time.
By Michael Ashton
A relatively quiet trading session for equities on Wednesday probably represents the reluctance to make big bets prior to Employment on Friday more than anything else. There was news to trade. Oil prices rallied another 2.4% with WTI over $102 on reports that Libya's strongman had come close to bombing oil facilities in the part of the country that rebels control. Even when it became apparent that he had missed (presumably intentionally since if he manages to win he would want to have those facilities, wouldn't he?) oil prices refused to retreat. The tension will not soon break, I expect.