interest rates

Why interest rates matter

Some context: I find that almost no one understands what interest rates are and what the Federal Reserve did last week when it “left rates unchanged.” But interest rates are important. Below is my brief, basic explanation of what interest rates are, what the Federal Reserve is doing when they set interest rates, and why […]

Read More

Brief musings on the market

The DJIA lost 3.57 percent today. Last Friday it lost 3.12 percent. This is nowhere near even the 20th worst day in the DJIA’s history—a 6.98 percent loss on September 29, 2008. But the past two trading days do represent the DJIA’s 19th and 20th worst daily point losses ever. Most economists think Greenspan’s Fed left […]

Read More

An educational outlook

I try to read First Trust’s Monday Morning Outlook every week. Today’s was especially good. Here’s a highlight: The good reason for slow economic growth is that government statisticians are having a hard time measuring true output. Productivity and GDP growth are not as slow as the official numbers say. For example, when people download free […]

Read More

A new piece, and a great interview

Here’s my new piece at EnhancingCapital.com on interest-sensitive investments — a handy little read, I hope, for anyone concerned about how an interest rate hike might affect their portfolio. Then again, I still stand by my prediction from last December: The Fed won’t raise interest rates in 2015. Inflation is just too low. In fact, I […]

Read More

The Fed is frustrating (and won’t raise rates in 2015)

The Editors at BloombergView are spot on with this one: Here’s the point, and it’s really quite simple: The Fed doesn’t know when it will start to raise interest rates, nor should it have to know, nor should it indulge analysts’ misconceived determination to find out. Interest-rate changes are not, and should not be, on […]

Read More

Central banking like it’s 1989

Ashley Kindergan writes a great piece at The Financialist on the growing divergence between central banks, the likes of which we haven’t seen in 25 years. In 2015, global monetary policy could look like a mirror image of its 1989 self. The Bank of Japan already expanded the scope of its asset purchases in October. The […]

Read More