16 Sep

Should the Fed Raise Interest Rates This Year?

September 16, 2015Printer-Friendly VersionThe Federal Reserve concludes its two-day meeting on Thursday and will announce whether or not they plan to raise interest rates, specifically the Federal Funds Rate. The Fed has kept the Federal Funds Rate at zero since 2008 and hasn’t raised the rate in over a decade. Since discontinuing its Quantitative Easing (QE) program in October of 2014, the market has been obsessed with when the Fed starts to raise interest rates. This obsession makes sense as the Fed has used “forward guidance” as another monetary policy tool in recent years. However, I believe the first increase in interest rates…

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28 Apr

Negative Interest Rates

April 28, 2015Printer-Friendly VersionImagine the following scenario: You wake up one morning and decide it’s time to open a new bank account. You gather your personal information, head to your local bank and sit down with a banker. You: “I would like to open a new bank account.”Banker: “Sure, what type of account are you interested in?”You: “Well, I’m not sure, what are your interest rates?”Banker: “Our current interest rate is negative 0.50%.”You: “Come again?”Banker: “Negative 0.50%.”You: “So, if I deposit $50,000, it will cost me $250 per year?”Banker: “Yes, but you could invest in our 2-yr CD. We have a new special rate…

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15 Jul

Escape Velocity

Posted by hancockp Categories: Investing Economy Federal Reserve Interest Rates Markets

July 15, 2014 Printer-Friendly VersionSummary Global stocks rallied during the second quarter led by emerging markets. The S&P 500 climbed to an all-time high aided by low interest rates, low inflation, slowly improving economic growth and continued expansive policies from the Federal Reserve. Global bond markets also performed well during the second quarter as interest rates fell driving bond prices higher. Most bond sectors have posted positive returns in 2014, led by municipal bonds and emerging market bonds. Economic growth remains low in the US and other developed economies despite highly accommodative policies from central banks. The winds of change are blowing as…

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1 Apr

How The Economic Machine Works

Posted by hancockp Categories: Economics Inflation Interest Rates Markets Investing

Understanding the ins and outs of the economy can be very challenging. Ray Dalio is one of the brightest minds that we have today in the investment world. Dalio has written a wonderful article on how the economy works. He also produced a video on this topic that does a fabulous job of explaining in simple terms how our economy works.…

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15 Mar

Fed's New Leader, Same Challenges

February 1st of this year marked the beginning of Janet Yellen’s term as the Chairman of the Federal Reserve as she took over for Ben Bernanke. The Federal Reserve System or “The Fed” was created by Congress in 1913 to provide the United States with a stable monetary and financial system. The Fed is charged with keeping inflation in check and to promote policies that will create jobs. They influence many aspects of the economy and in recent years, the Chairman of the Fed has become arguably the most important position in the global economy.Since 2008, The Fed has engaged in “ea…

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