05-11-2017, 01:19 PM
The party continues....
In London, after having signaled a rate hike several times without following through, Bank of England Governor Mark Carney finally announced an increase on Nov. 2 -- the first in 10 years. However, with Brexit-related uncertainties influencing economic policy, this may turn out to be a “once-and-done” strategy rather than the start of a process of serial tightening. Some investors even fear that the central bank may be forced to reverse the rate hike if the economy weakens markedly. Rather than appreciate after the monetary tightening, the pound fell sharply.
You will not see warnings of monetary tightening from Japan either. Prime Minister Shinzo Abe’s party won a landslide victory in elections held Oct. 22, allowing him to continue the stimulative policies he has favored. Speculation is growing that Haruhiko Kuroda, under whose leadership the Bank of Japan increased its balance sheet to an unprecedented 100 percent of gross domestic product, may be reappointed in April.
The message for investors: The Yellen-put, Draghi-put, Carney-put and Kuroda-put are all very much alive. That means the three decade-long bond rally is likely to continue, even as the speculative bubble in equities gets bigger.
https://www.bloomberg.com/view/articles/...going-away
[/url]
[url=https://www.bloomberg.com/view/articles/2017-11-03/party-on-the-central-bank-put-isn-t-going-away]
In London, after having signaled a rate hike several times without following through, Bank of England Governor Mark Carney finally announced an increase on Nov. 2 -- the first in 10 years. However, with Brexit-related uncertainties influencing economic policy, this may turn out to be a “once-and-done” strategy rather than the start of a process of serial tightening. Some investors even fear that the central bank may be forced to reverse the rate hike if the economy weakens markedly. Rather than appreciate after the monetary tightening, the pound fell sharply.
You will not see warnings of monetary tightening from Japan either. Prime Minister Shinzo Abe’s party won a landslide victory in elections held Oct. 22, allowing him to continue the stimulative policies he has favored. Speculation is growing that Haruhiko Kuroda, under whose leadership the Bank of Japan increased its balance sheet to an unprecedented 100 percent of gross domestic product, may be reappointed in April.
The message for investors: The Yellen-put, Draghi-put, Carney-put and Kuroda-put are all very much alive. That means the three decade-long bond rally is likely to continue, even as the speculative bubble in equities gets bigger.
https://www.bloomberg.com/view/articles/...going-away
[/url]
[url=https://www.bloomberg.com/view/articles/2017-11-03/party-on-the-central-bank-put-isn-t-going-away]