So if an investor
expects market interest rates to go down, they want a long - duration bond portfolio because it will maximize the increase in price.
We expect market interest rates to rise though, especially short term rates.
Not exact matches
At the March 20 - 21 meeting, the Federal Open
Market Committee voted to raise its benchmark
interest rate by 25 basis points to a range of 1.50 % to 1.75 %, as had been widely
expected.
Markets do not
expect a change in
interest rates from the Federal Reserve at the conclusion of its meeting on Wednesday, though analysts will be watching for any change in language and indications that a June hike is likely.
For one thing, those 10 - year Canada bonds are yielding just 1.14 % and could lose value should
interest rates rebound from their recent lows, as many
market - watchers
expect.
In a client note on Thursday titled «Yanking down the yields,» the
interest -
rates strategist projected that bond yields would be much lower than the
markets expected because central banks including the Federal Reserve were reluctant to raise
interest rates.
Elsewhere, the
market is also
expecting a possible
interest rate hike from the Federal Reserve at its December meeting.
If the
market sees the Fed behind the curve,
interest rates could rise further and faster than
expected.
Such risks, uncertainties and other factors include, without limitation: (1) the effect of economic conditions in the industries and
markets in which United Technologies and Rockwell Collins operate in the U.S. and globally and any changes therein, including financial
market conditions, fluctuations in commodity prices,
interest rates and foreign currency exchange
rates, levels of end
market demand in construction and in both the commercial and defense segments of the aerospace industry, levels of air travel, financial condition of commercial airlines, the impact of weather conditions and natural disasters and the financial condition of our customers and suppliers; (2) challenges in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies and new products and services; (3) the scope, nature, impact or timing of acquisition and divestiture or restructuring activity, including the pending acquisition of Rockwell Collins, including among other things integration of acquired businesses into United Technologies» existing businesses and realization of synergies and opportunities for growth and innovation; (4) future timing and levels of indebtedness, including indebtedness
expected to be incurred by United Technologies in connection with the pending Rockwell Collins acquisition, and capital spending and research and development spending, including in connection with the pending Rockwell Collins acquisition; (5) future availability of credit and factors that may affect such availability, including credit
market conditions and our capital structure; (6) the timing and scope of future repurchases of United Technologies» common stock, which may be suspended at any time due to various factors, including
market conditions and the level of other investing activities and uses of cash, including in connection with the proposed acquisition of Rockwell; (7) delays and disruption in delivery of materials and services from suppliers; (8) company and customer - directed cost reduction efforts and restructuring costs and savings and other consequences thereof; (9) new business and investment opportunities; (10) our ability to realize the intended benefits of organizational changes; (11) the anticipated benefits of diversification and balance of operations across product lines, regions and industries; (12) the outcome of legal proceedings, investigations and other contingencies; (13) pension plan assumptions and future contributions; (14) the impact of the negotiation of collective bargaining agreements and labor disputes; (15) the effect of changes in political conditions in the U.S. and other countries in which United Technologies and Rockwell Collins operate, including the effect of changes in U.S. trade policies or the U.K.'s pending withdrawal from the EU, on general
market conditions, global trade policies and currency exchange
rates in the near term and beyond; (16) the effect of changes in tax (including U.S. tax reform enacted on December 22, 2017, which is commonly referred to as the Tax Cuts and Jobs Act of 2017), environmental, regulatory (including among other things import / export) and other laws and regulations in the U.S. and other countries in which United Technologies and Rockwell Collins operate; (17) the ability of United Technologies and Rockwell Collins to receive the required regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the
expected benefits of the merger) and to satisfy the other conditions to the closing of the pending acquisition on a timely basis or at all; (18) the occurrence of events that may give rise to a right of one or both of United Technologies or Rockwell Collins to terminate the merger agreement, including in circumstances that might require Rockwell Collins to pay a termination fee of $ 695 million to United Technologies or $ 50 million of expense reimbursement; (19) negative effects of the announcement or the completion of the merger on the
market price of United Technologies» and / or Rockwell Collins» common stock and / or on their respective financial performance; (20) risks related to Rockwell Collins and United Technologies being restricted in their operation of their businesses while the merger agreement is in effect; (21) risks relating to the value of the United Technologies» shares to be issued in connection with the pending Rockwell acquisition, significant merger costs and / or unknown liabilities; (22) risks associated with third party contracts containing consent and / or other provisions that may be triggered by the Rockwell merger agreement; (23) risks associated with merger - related litigation or appraisal proceedings; and (24) the ability of United Technologies and Rockwell Collins, or the combined company, to retain and hire key personnel.
This morning, the European Central Bank kept
interest rates unchanged at record lows, as
expected, but European
markets could take another turn depending on what happens when European Central Bank president Mario Draghi takes questions later this morning.
But concerns the Fed may increase
interest rates sooner than
expected following last week's strong jobs report are starting to creep into the
market.
Deutsche Bank economists predict the curve will invert in 2019 as the Fed keeps raising
interest rates by a quarter percentage point every quarter, as
markets expect.
FRANKFURT, Oct 4 - Key Euribor bank - to - bank lending
rates hit fresh record lows on Thursday, as the
markets were
expecting the European Central Bank to provide hints whether it planned to cut
interest rates further.
Markets also
expect a U.S.
interest rate hike in March.
Despite the strong labor
market and calm economy, Leech does not
expect the Fed to raise
interest rates at its March meeting.
Markets expect the Fed to hike
interest rates three times this year, and Powell's remarks seemed to indicate the central bank remains on a tightening path.
Yoon
expects the BOK to raise
interest rates in the second half of this year as the nation's financial
markets will remain calm even if the Fed raises
interest rates.
On Wall Street, stocks rose on Friday after job growth surged more - than -
expected in June, reaffirming labor
market strength that could keep the Federal Reserve on track for a third
interest rate hike this year.
Further, we do not
expect the bond
market to sell off and
interest rates to go shooting up when the Fed raises the
interest rate from zero by an eighth or a quarter percent.
The central bank bombarded
markets in the past week with the message that it could raise
interest rates for the second time in nine years as early as June, if the economy continues to improve as
expected.
Most
market participants
expect the Federal Reserve to start raising its key
interest rate in the coming months.
The
markets won't get off of «lower for longer,» meaning they
expect lower
interest rates forever.
Meanwhile, with a series of supportive economic factors at play «we
expect the country's real estate
market to continue the strong showing it posted in the second half of 2013,» Soper said, noting among other things favourable
interest rates and an improving U.S. economy fuelling demand for Canadian exports.
The ECB's governing council is due to meet next on Dec. 3, two weeks before the Federal Open
Market Committee Meeting where the Fed is
expected to raise its official
interest rates.
The more consequential reforms — such as introducing
market - based
interest rates, reducing excess capacity, subjecting state - owned enterprises to increased competition and financial discipline, enforcing strict environmental laws, and raising prices of natural resources — are
expected to depress growth.
Powell is
expected to follow Yellen's footsteps and raise
interest rates in 2018 — watching
market indicators all the while.
Powell is
expected to gradually raise
interest rates three to four times in 2018 — with the
market watching closely over what he might do.
In both cases, the statements are intended to send a clear signal to financial -
market participants that they should
expect interest rates to remain low for quite a while — and this expectation is then supposed to drive a faster economic recovery.
As widely
expected by the
markets, the Fed raised
interest rates by 25 basis points on Wednesday and upgraded its economic outlook, saying that economic activity and jobs gains had been strong in recent months.
The
market expected that Britain would have to devalue its currency and no amount of
interest rate hikes or currency purchasing would change that.
The
market expected that Britain would have to devalue its currency and that no amount of
interest rate hikes or currency purchasing would change that.
With the economy picking up steam, the Federal Reserve is widely
expected to begin raising a key short - term
interest rate when the Federal Open
Market Committee concludes a two - day meeting on Dec. 14.
The wage pop [last Friday's 2.9 % growth in hourly wages] spooked the
markets because investors, already skittish as valuations were a bit steep (though not as bad as people have been saying, given strong current and
expected corporate earnings), envisioned this sequence: wage growth gooses price growth (i.e., inflation), which raises both
market and Federal Reserve
interest rates, which slows growth and shaves corporate profit margins.
While we're
expecting a positive reaction from the financial
markets to Emmanuel Macron's presidential victory, such a rally will likely be mitigated by the expectations of rising
interest rates and a renewed focus on the challenges Macron will face.
Higher income consumers are also
expected to rein in spending after seeing their stock portfolios oscillate, due to the turmoil in the global stock
markets following the devaluation of the Chinese yuan and the Federal Reserve's decision to hold off raising
interest rates.
As long as the
market expects the Fed to cut, the pressure on the stock
market will be mitigated by an outlook for some relief from present
interest rate policy.
The US export sector is getting the benefit of a lower dollar; there's a significant fiscal package in the pipeline, which will add more than 1 per cent of GDP to private spending power; and sharp cuts have been made in US official
interest rates, with financial
markets expecting more to come.
The Federal Reserve's first
interest rate hike in a decade is
expected as early as this fall, an action with far - reaching implications for every corner of the world economy — from your mortgage
rate to emerging -
market trade.
What we have really seen over the past several years, in terms of the appreciation of
markets and the decline of
interest rates based on what the Fed has been doing, is a result which has eliminated the possibility of investors in bonds and stocks to earn an adequate return relative to their
expected liabilities.
Despite the mainland's capital controls, its bond
market joined the global
market ructions on Thursday after the U.S. Federal Reserve surprised by saying it
expected to hike
interest rates three times next year, rather than the previously forecast two hikes.
This was the lesson taught by William Petty in the 17th century and used by economists ever since: The
market price of land, a government bond or other security is calculated by dividing its
expected income stream by the going
rate of
interest — that is, «capitalizing» its rent (or any other flow of income) into what a bank would lend.
The reality is that one doesn't need
interest rates reasonably estimate 10 - year prospective
market returns, just as one doesn't need
interest rates to calculate that a $ 100
expected payment in 10 years, at a current price of $ 65, will result in an
expected total return of 4.4 % over the coming decade.
The fifth, and most recent, factor is the US Federal Reserve's signals that it might end its policy of quantitative easing earlier than
expected, and its hints of an eventual exit from zero
interest rates, both of which have caused turbulence in emerging economies» financial
markets.
World growth will remain low on average but negative in the UK and Europe; price inflation will remain sufficiently subdued for a while longer so as to impose no constraint on monetary expansion; central banks will sustain a regime of negative real
interest rates and rapid monetary expansion; the risk of a eurozone collapse is off the table for now; finally, stock
markets should continue to perform better than
expected, even though the four - year old cyclical bull
market is long by historical standards.
The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including
expected equities
market returns, future
interest rates, implied industry outlook and forecasted company earnings.
The second phase occurred from around mid year, when it became widely
expected by the
market that the US economy was going to have a soft landing, and that no further increases in US
interest rates were likely.
People are saying the
markets are expensive right now but if
interest rates stay low for the foreseeable future (10 - 15 years) there's still a reasonable
expected return.
... The pricing of financial assets, and today's extraordinarily low
interest rates indicate that a flight from the dollar is the last thing
expected in financial
markets.
So even given the level of
interest rates, we
expect a
market loss of about -65 % to complete the current speculative
market cycle.
The central bank made a concerted effort starting late last year to divorce its «forward guidance» on
interest rates, what it tells
markets about the
expected future path of policy, from specific calendar dates.