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Interest Rates

After several years of historically low interest rates, the Federal Reserve declared intentions for a rate hike this year, barring an economic slowdown. That’s why you can bet Janet Yellen and her fellow policymakers are closely monitoring China’s stock market crash and its impact on U.S. stocks. Recent…

Forget about higher interest rates. To starve off an economic collapse, the Federal Reserve may have to resort to another round of quantitative easing. At least, that’s according to famed investor Peter Schiff. “It’s not just a 580 points we drop today or the 530 on Friday or…

The tumbling gold prices in recent years have made the shiny metal look down and out. However, not everyone shares the bearish view. In fact, billionaire investor Stan Druckenmiller just bought millions of shares of a gold exchange traded fund (ETF). If you are not familiar with Stan…

Thanks to irrationality; gold prices have fallen to the levels not seen since 2010. As I see it, at the current price, the precious metal is presenting a great long-term opportunity. One of the biggest reasons investors should be paying attention to the yellow metal is the turbulence…

Although the U.S. labor market has seen steady declines in unemployment, wage growth has ground to a near standstill, suggesting the U.S. economy is far less stable than commonly believed. The Employment Cost Index edged only 0.2% in the second quarter; the smallest gain since the index was…

In the wake of Greece’s debt crisis and China’s stock market crash, Federal Reserve Chairwoman Janet Yellen reiterated the likelihood of an interest rate hike this year. The central banker’s comments came during her semi-annual testimony before Congress. Dr. Yellen read from a prepared statement, saying, “If the…

Gold prices have plunged. But those that are holding the yellow metal needn’t worry. Soon, you might be able to buy gold for double, even triple today’s price. Let me explain. Monetary Crisis Central banks around the world have one thing in common: they like to print money.…

The Federal Reserve provides projections on U.S. gross domestic product (GDP) four times each year; in March, June, September, and December. Just a few days ago, the Fed released its June projections. The Fed expects the U.S. economy to grow between 1.8% and two percent this year. (Source:…

Soaring mortgage applications are usually an indication of a strong economy, but the recent bump in volume could actually signal that problems are ahead. On Wednesday, the Mortgage Bankers Association reported that total U.S. mortgage application volumes jumped 8.4% from the previous week on a seasonally adjusted basis.…

Over the past few years, buying bonds was the trade. Be it government bonds, municipal bonds, or high-yield corporate bonds. Thanks to the Federal Reserve, every time interest rates were lowered, or every time there was an announcement of new quantitative easing by the Fed, bond prices soared…

On Thursday, June 4, 2015, the International Monetary Fund (IMF) urged the Federal Reserve to delay its interest rate hike until 2016 while it downgrades the U.S. economy’s outlook. (Source: Associated Press, June 4, 2015.) The IMF said, "The underpinnings for continued growth and job creation remain in…

On Tuesday, June 2, 2015, a voting member of the Federal Open Market Committee (FOMC), Lael Brainard said that current economic data does not suggest that the U.S. will see a significant second-quarter rebound. She also stated that a strong dollar delays U.S. interest rates to nominal levels.…

The U.S. dollar has risen significantly against other major currencies over the last few months. This already has and will continue to negatively affect U.S.-based companies with global operations. This isn’t rocket science; as the U.S. dollar increases in value, companies with business outside of the U.S. will…

Low interest rates create an incentive for retail investors, hedge fund managers, and banks to consider riskier assets that offer higher returns. Cheap money also makes it easy to borrow when the return exceeds the cost of borrowing. When short-term interest rates are low and unstable, investors are…

The Federal Reserve is expected to raise interest rates in September. When this happens, I expect the U.S. housing market to become one of its first and biggest victims. You must remember that the housing market and interest rates have a negative relationship. If interest rates rise, home…

On Sunday, May 10, the People’s Bank of China (PBOC) announced that it will lower its one-year benchmark lending rate by 25 basis points to 5.1%. They also cut the one-year deposit rate by the same amount to 2.25%. This is the third interest rate cut by China’s…