The last one here should come as no surprise given central banks have anchored short - term interest rates at zero and long -
term rates continue to be suppressed by massive asset - purchase programs and the generally sluggish nature of the global recovery.
Fixing rates at near historic lows seems to be a prudent decision that leaves HASI's earnings profile in a much stronger position as short -
term rates continue to rise in 2018.
Not exact matches
Important factors that could cause actual results to differ materially from those reflected in such forward - looking statements and that should be considered in evaluating our outlook include, but are not limited to, the following: 1) our ability to
continue to grow our business and execute our growth strategy, including the timing, execution, and profitability of new and maturing programs; 2) our ability to perform our obligations under our new and maturing commercial, business aircraft, and military development programs, and the related recurring production; 3) our ability to accurately estimate and manage performance, cost, and revenue under our contracts, including our ability to achieve certain cost reductions with respect to the B787 program; 4) margin pressures and the potential for additional forward losses on new and maturing programs; 5) our ability to accommodate, and the cost of accommodating, announced increases in the build
rates of certain aircraft; 6) the effect on aircraft demand and build
rates of changing customer preferences for business aircraft, including the effect of global economic conditions on the business aircraft market and expanding conflicts or political unrest in the Middle East or Asia; 7) customer cancellations or deferrals as a result of global economic uncertainty or otherwise; 8) the effect of economic conditions in the industries and markets in which we operate in the U.S. and globally and any changes therein, including fluctuations in foreign currency exchange
rates; 9) the success and timely execution of key milestones such as the receipt of necessary regulatory approvals, including our ability to obtain in a timely fashion any required regulatory or other third party approvals for the consummation of our announced acquisition of Asco, and customer adherence to their announced schedules; 10) our ability to successfully negotiate, or re-negotiate, future pricing under our supply agreements with Boeing and our other customers; 11) our ability to enter into profitable supply arrangements with additional customers; 12) the ability of all parties to satisfy their performance requirements under existing supply contracts with our two major customers, Boeing and Airbus, and other customers, and the risk of nonpayment by such customers; 13) any adverse impact on Boeing's and Airbus» production of aircraft resulting from cancellations, deferrals, or reduced orders by their customers or from labor disputes, domestic or international hostilities, or acts of terrorism; 14) any adverse impact on the demand for air travel or our operations from the outbreak of diseases or epidemic or pandemic outbreaks; 15) our ability to avoid or recover from cyber-based or other security attacks, information technology failures, or other disruptions; 16) returns on pension plan assets and the impact of future discount
rate changes on pension obligations; 17) our ability to borrow additional funds or refinance debt, including our ability to obtain the debt to finance the purchase price for our announced acquisition of Asco on favorable
terms or at all; 18) competition from commercial aerospace original equipment manufacturers and other aerostructures suppliers; 19) the effect of governmental laws, such as U.S. export control laws and U.S. and foreign anti-bribery laws such as the Foreign Corrupt Practices Act and the United Kingdom Bribery Act, and environmental laws and agency regulations, both in the U.S. and abroad; 20) the effect of changes in tax law, such as the effect of The Tax Cuts and Jobs Act (the «TCJA») that was enacted on December 22, 2017, and changes to the interpretations of or guidance related thereto, and the Company's ability to accurately calculate and estimate the effect of such changes; 21) any reduction in our credit
ratings; 22) our dependence on our suppliers, as well as the cost and availability of raw materials and purchased components; 23) our ability to recruit and retain a critical mass of highly - skilled employees and our relationships with the unions representing many of our employees; 24) spending by the U.S. and other governments on defense; 25) the possibility that our cash flows and our credit facility may not be adequate for our additional capital needs or for payment of interest on, and principal of, our indebtedness; 26) our exposure under our revolving credit facility to higher interest payments should interest
rates increase substantially; 27) the effectiveness of any interest
rate hedging programs; 28) the effectiveness of our internal control over financial reporting; 29) the outcome or impact of ongoing or future litigation, claims, and regulatory actions; 30) exposure to potential product liability and warranty claims; 31) our ability to effectively assess, manage and integrate acquisitions that we pursue, including our ability to successfully integrate the Asco business and generate synergies and other cost savings; 32) our ability to consummate our announced acquisition of Asco in a timely matter while avoiding any unexpected costs, charges, expenses, adverse changes to business relationships and other business disruptions for ourselves and Asco as a result of the acquisition; 33) our ability to
continue selling certain receivables through our supplier financing program; 34) the risks of doing business internationally, including fluctuations in foreign current exchange
rates, impositions of tariffs or embargoes, compliance with foreign laws, and domestic and foreign government policies; and 35) our ability to complete the proposed accelerated stock repurchase plan, among other things.
I mean we're going to see this
continued back and forth between the Fed talking about raising interest
rates and therefore markets trying to absorb that higher
term structure of
rates, that's going to
continue.
A few things stand out about this particular
rate change: first, the magnitude of influence that just a quarter percentage - point change had on the stock market; second, the current
rate with an upper range of.50 % compared to the various long -
term averages of about 5 %; and third, the
rate remains historically low, with only minute incremental changes, despite the relatively good news we
continue to read about the economy.
It pointed to the
continued presence of fragile fixed - income market liquidity as a key vulnerability in the overall financial system, while it repeats the risks of a sharp increase in long -
term interest
rates, stress from emerging markets like China and prolonged weakness in commodity prices.
As universally expected, the Federal Reserve left things as they were after yesterday's Federal Open Market Committee meeting: the target for the Fed funds
rate stays between 0 and 0.25 per cent and the bank will
continue to buy $ 40 billion - worth of mortgage - backed securities, plus $ 45 billion of longer -
term treasuries per month.
Others have noted that if the Fed
continues raising short -
term rates while long -
term rates remain stalled, it could turn the shape of the bond yield curve upside down, a typical signal of recession.
The reason for such a broad range all has to do with financing, which includes
rates,
terms, buying points, etc., so find a good lender who can explain all your options, and
continue to educate yourself more about the process on our mortgage page and other helpful housing and financial sites.
«If the Fed
continues to raise
rates according to our forecast and the
term premium does not recover, the yield curve would invert by the end of 2019, potentially as early as June of next year,» they write in a note.
Apple, Google, Amazon, and Facebook have all but thumbed their nose at short -
term shareholders and
continue to invest in research at very high
rates.
China fears, along with expectations related to the Fed's interest
rate plans, will
continue to dominate near -
term market moves.
Less clear is the impact on long
term rates, but they are likely to
continue to move higher.
With a long -
term growth
rate of 27.6 percent, the company is expected to
continue its rise.
Rate - sensitive utility stocks advanced as long -
term interest
rates continue a two - day decline.
A dramatic reduction in short
term rates packs a big punch when it first happens, but the jolt wears off as
rates continue to stay low.
Citing persistent weak labor - market conditions and
continued global financial turmoil, the Fed says its monetary easing «should put downward pressure on longer -
term interest
rates, support mortgage markets and help to make broader financial conditions more accommodative.»
Although the
rate could
continue to trend down in the near
term, it shows that the US workforce is fairly well utilized.
Mr. Draghi said Thursday that the bond buying would
continue through September 2016 or «until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation
rates below, but close to, 2 percent over the medium
term.»
I had expected that longer -
term rates would be held somewhat in check by
continued strong overseas demand.
We certainly don't see 30 + % growth
continuing for the long -
term, but the company looks able to sustain a low double - digit growth
rate for some time to come.
Long bonds will end up being a very volatile investment at some point once
rates or inflation rise from current levels, but intermediate -
term bonds should
continue to dampen stock market volatility.
However, as the global economic recovery
continues, long -
term interest
rates in Canada and elsewhere will nonetheless start to slowly rise.
Moreover, to support a stronger economic recovery, the FOMC is purchasing long -
term Treasury securities at a
rate of $ 45 billion per month and agency mortgage - backed securities (MBS) at a
rate of $ 40 billion per month, and will
continue purchasing assets until it sees substantial improvement in the outlook for the labor market, conditional on ongoing assessment of benefits and costs.
On the positive side, long -
term interest
rates continue to act well.
For example, from: 1) the replenishment of foreign exchange buffers large enough to protect the economy against a protracted shock; 2) a significant reduction in government debt metrics; 3) a successful diversification of the economy and government revenues that will become less dependent on oil receipts; 4)
continued improvements in governance and institutional strength which act as long —
term constraints on Angola's
rating.
Interest
rates have
continued to be pushed lower and lower and lower and most of this is because the Fed keeps on adjusting that federal fund's
rate and adjusting interest
rates down in the way that they do that is by putting cash into the market and buying back bonds or short -
term bonds with the federal fund's
rate.
The group
continues to face a series of headwinds, including higher short -
term rates, a flatter yield curve, and a housing market that looks to be cooling.
Finally, in our view, opportunities do
continue to present themselves over the short - to - intermediate
term in fixed income; longer
term, we are cognizant that there could well be some
rate risk down the line driven by inflation.
The Fed
continues to hike, though, causing the difference between short - and long -
term rates to converge and then even invert (meaning short
rates go above long
rates).
Add - in the market «comfort» of knowing that both the BoJ (Iwata reiterating that they can accelerate / expand purchases overnight) and the ECB (extension expectations tomorrow) will
continue providing a QE - monetary policy «backstop» to keep the grind higher in
rates from getting «disorderly» in the medium -
term.
We
continue to have a very positive fundamental intermediate -
term view, but believe (1) the improved economic data, (2) fear of higher interest
rates, (3) a less dovish Fed, (4) historically low volatility, and extreme overbought condition creates an environment ripe for a correction.
In
terms of equities, the S&P 500 had its best month in four years in October, while booming corporate bond sales
continued to meet high demand, appearing to reflect confidence in the strength of the US corporate sector as well as the persistence of low market interest
rates.
His preferred strategy was for the Fed to publish a detailed plan for shrinking its balance sheet, allow some time to gauge the market reaction, and then
continue to use short
term rates as the primary policy lever.
In contrast, loans to investors for both new construction and existing houses (a sector likely to have been less affected by the introduction of the GST) have
continued to grow at double - digit
rates in year - ended
terms.
Surveys of investment intentions point to
continued growth in business investment in real
terms, albeit at lower
rates than the robust growth seen through 2003.
All in all, the Fed
continues to expect inflation to rise gradually toward 2 % over the medium
term as the labor market improves further and the transitory effects of energy price declines and other factors dissipate, but the pace for hikes in interest
rates could well be moderate, as the Fed has been indicating.
By
continuing along its current course (which involves MBS purchases and keeping the funds
rate near zero), the Federal Reserve is having an indirect effect on long -
term mortgage
rates.
We expect the Fed to
continue a slow, patient pace of short -
term rate increases, not because the economy is overheating, but in order to get
rates back to more normal levels.
Such low long -
term rates suggest that markets currently expect both low inflation and low real interest
rates to
continue for many years.
He believes the Fed will
continue to lower its long
term interest
rate outlook, and he does not see big increases in interest
rates over the next few years.
Given our expectation for slowly increasing longer -
term rates, we expect these
rates to
continue climbing over time.
Prolonged curve flattening from the aforementioned easy financial conditions (low long -
term rates) despite rising short -
term rates would steadily increase institutions» vulnerability to potential balance sheet shocks, as investors
continue to add low quality and illiquid assets to «enhance returns.»
The Fed is expected to
continue raising short -
term interest
rates in 2018, and is also shrinking its enormous balance sheet resulting from the quantitative easing programs it undertook during the financial crisis.
That said, there is currently little sign of any acceleration in activity or inflation, and any potential stimulus from the Trump administration still seems some way off, so the trend growth
rate of around 2 % looks set to
continue in the near
term.
There is no doubt in homebuyers» minds that interest
rates will
continue higher (76 %) but 53 % said they are not stress - testing their mortgages to ensure long -
term affordability; although those in Ontario and BC are more likely to do so (53 % and 51 % respectively).
The Federal Reserve can stay patient and
continue to raise short -
term interest
rates at a slow pace, extending this expansion.
The more general forces that have influenced the exchange
rate over the past year or so have been the relative strength of the Australian economy, the associated yield differential in favour of Australian dollar assets, and the
continued improvement in Australia's
terms of trade, which are now at their highest level in more than 25 years.
But as Bernanke noted: «Despite this improvement, the job market remains weak overall: The unemployment
rate is still well above its longer - run normal level,
rates of long -
term unemployment are historically high, and the labor force participation
rate has
continued to move down.
The favourable near -
term outlook for inflation is being underpinned by
continued help from the exchange
rate in holding down import prices.