Sentences with phrase «rate tightening cycle»

In other words, the market's return has actually been sub-par for a reasonably long period following the final hike of a rate tightening cycle.

Our view that the Canadian interest rate tightening cycle will lag that in the United States is therefore primarily the result of factors outside of the respective business cycles.

High dividend stocks and exchange - traded funds are often thought to be vulnerable when the Federal Reserve embarks upon rate tightening cycles.

Not exact matches

The somewhat stronger U.S. inflation signal implies a modestly more hawkish U.S. Federal Reserve tightening cycle than what we would expect to see out of the Bank of Canada (BoC) after it left its key overnight lending rate unchanged at 1 % this month.

Rather than a traditional offsetting relationship at this early point of the tightening cycle, the near - term interest rate outlook and the near - term profits outlook are both negative.

The question lingering on investors» minds is how many rate increases the central bank intends to implement until the end of the tightening cycle, and if it was willing to raise rates above it its so - called neutral rate.

Also, bills have typically traded below other money market rates during tightening cycles, as they do now; periods where bills trade at or above other rates have been the exception and not the rule.36 Thus, the smaller increase in bill yields than in rates on other term instruments is not surprising, and I do not read it as undermining the general conclusion that the policy rate increase was effective in firming money market conditions.37

During this cycle of monetary tightening, the fed funds rate — the rate controlled by the Fed to influence borrowing costs — has been raised four times.

Fed has hiked 14 times and 10 yr rates are unchanged while 30 yr rates are 60bp lower than at the beginning of the tightening cycle.

In some ways, this U.S. policy rate hike cycle is similar to the one in the mid-2000s, where the U.S. dollar remained weak and EMs» growth cycle was not derailed by U.S. monetary tightening.

The pace of rate increases has picked up since the central bank began its tightening cycle in December 2015.

In previous episodes, long yields tended to rise in the early stages of a tightening cycle at least as much as the rise in short rates, reflecting inflation concerns.

After increasing their policy rates by 125 basis points and 150 basis points respectively in the current cycle, market participants expect that the tightening cycles in both the UK and New Zealand are close to an end, although in both cases, recent inflation data have caused some participants to revise that assessment.

Now, as I noted fairly early this year, there's no statistical evidence at all that stock prices or corporate earnings perform well in the 18 months or so following the end of a rate - tightening cycle.

That would be a relatively low level by historical standards; in the past two tightening cycles by the Fed, the federal funds rate peaked at around 6 per cent.

Since the beginning of its current tightening cycle in June 2004, the federal funds rate has been increased from 1.0 per cent to 2.5 per cent in increments of 25 basis points at each Federal Open Market Committee (FOMC) meeting.

Implied volatilities gradually declined around the world in the second half of 2003, as it became clearer that the easing cycle was drawing to a close, with some central banks beginning to tighten monetary policy after a prolonged period of relatively low and stable interest rates.

Fed Chair Janet Yellen last week signaled the U.S. central bank is on track to raise rates this year, despite a weak first quarter that some analysts believe could force the Fed to wait longer before starting its first tightening cycle since 2004 - 2006.

Indeed, I believe the Fed will raise rates in a slow manner that doesn't excessively unsettle the economy or markets, with the gradual nature of the tightening cycle allowing markets to absorb the increases with relative ease.

Our interest rate outlook is also partly driven by the view that the BoC intentionally wants to lag the Fed in terms of its tightening cycle.

With the unemployment rate down to five percent and the Fed embarked on a tightening cycle, the argument runs, indicators will start returning to earlier, higher growth trends.

«While the Fed is moving in one direction and getting ready to raise interest rates and embark on a tightening cycle, the European Central Bank is going in the other direction and easing monetary policy,» says Eric Viloria, a currency strategist at Wells Fargo in New York.

While the Fed is moving in one direction and getting ready to raise interest rates and embark on a tightening cycle, the European Central Bank is going in the other direction and easing monetary policy.

When the Fed does get closer to its dot - plot tightening cycle for short - term interest rates, I'll be there backing up the truck.

One more note: I believe gradualism is almost required in Fed tightening cycles in the present environment — a lot more lending, financing, and derivatives trading gears off of short rates like three - month LIBOR, which correlates tightly with fed funds.

The Reserve Bank of New Zealand raised its target rate by 25 basis points to 6.75 per cent in March, taking the cumulative increase since this tightening cycle began in early 2004 to 175 basis points.

While the Fed has verbally committed to a shallow and short tightening cycle, interest rates are still likely to rise.

Fed tightening cycles often start with a small explosion where short - dated financing for thinly capitalized speculators evaporates, because of the anticipation of higher financing rates.

However, the index had positive cumulative returns (2.64 % and 63.66 %) during the other two tightening cycles, during which rate increases were fairly steady over time.

Interest rate - hiking cycles were measured by Fed tightening cycles.

During 2004 a leading quantitative analyst predicted the the market multiple on the S&P 500 stocks would decline as interest rates increased, reflecting the Fed's tightening cycle.

If you look at periods where the price / peak earnings multiple was 16 or higher on the S&P 500, the final rate hike of a tightening cycle was actually associated with losses on an annualized total return basis, averaging -7.18 % over the following 6 months, -9.94 % over the following 12 months, and -5.87 % over the following 18 months.

We expect the current tightening cycle will be steady and gradual, likely resulting in four hikes in 2018 and two or three hikes in 2019 until rates reach 3 % to 3.25 %.

They can engage in fancy strategies where they try to remove policy accommodation either through rates or the size of the balance sheet, but one thing Fed history teaches us is that the Fed doesn't know what will happen when a tightening cycle starts, but usually it ends with a bang — some market blowing up.

That works well when interest rates are falling, or when the FOMC is on hold at the bottom of the cycle, but once the hint that the first tightening might occur, it doesn't work well until the first loosening is hinted.

One more note: I believe gradualism is almost required in Fed tightening cycles in the present environment — a lot more lending, financing, and derivatives trading gears off of short rates like three - month LIBOR, which correlates tightly with fed funds.

This means that as the central bank undergoes a tightening cycle, it could be beneficial to trade interest rate risk for credit risk, if one believes in the continuing strength of an economy.

But tightening the Fed funds rate is not easy, particularly toward the end of the cycle.