Taper First Or Lift Rates First – Does It Really Matter?

Here is a riddle for you this Friday. When Central Banks who have taken interest rates artificially low, and pumped up markets by various forms of asset purchase and money creation, decide its time to reverse course, if they can, do they reduced asset purchases first, or lift rates first? Yesterday as we discussed, the FED signalled a faster rate of tapering – meaning they are buying smaller amounts of Government bonds, before lifting rates. They said they cannot also lift rates as this would confuse the markets.

But in the UK, the Bank of England just did the opposite, lifted the cash rate a tad, whilst maintaining asset purchases. So what gives?

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.

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The FED’s Mega Pivot (And What It Means)

The Federal Reserve has flagged one of the most hawkish policy pivots in years, saying it will double the pace at which it’s scaling back purchases of Treasuries and mortgage-backed securities to $30 billion a month, putting it on track to conclude the program in early 2022, rather than mid-year as initially planned.

“Economic developments and changes in the outlook warrant this evolution of monetary policy,” Fed Chair Jerome Powell told reporters during a post-meeting press conference. “The economy has been making rapid progress toward maximum employment.”

This marks the next turn as they intensify their battle against the hottest inflation in a generation. And not only will they end their asset-buying program earlier but they are also signaling interest rate rises in 2022 – a faster pace than expected.

It seems the run of ultra-easy policy since the beginning of the Covid pandemic is coming to a close.

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

FINAL REMINDER: DFA Live 8pm Tonight – Steve Keen and Victor Kline

Join us for a live Q&A as I discuss the intersection of Politics and Economics with Professor Steve Keen (he has just released a new book) and the Founder of the New Liberals Victor Kline. This is part 2 of a series. Part one is here: https://youtu.be/t8f2EFRyXUY

You can ask a question live via the YouTube Chat.

Australia’s Universities: Can They Reform? – With Salvatore Babones

Salvatore Babones is an American sociologist, associate professor at the University of Sydney, and an expert in the areas of Chinese and American economy and society. His research is related to macro-level structure of the world economy, with a particular focus on China’s global economic integration.

His latest book is Australia’s Universities: Can They Reform?

https://www.australiasuniversities.com/

Australia’s universities are in crisis—and this time it’s real.

Struck by simultaneous financial, pedagogical, and ideological challenges, Australia’s entire university system stands in desperate need of reform. But good reform requires good data, and each of the major players in Australia’s university debate has strong incentives to warp the data in its own favour. In this timely book, sociologist and higher education commentator Salvatore Babones delivers the insights Australians need in order to reform what are, after all, their universities.

Website link:
https://www.australiasuniversities.com/

Purchase links:
https://www.oceanreevepublishing.com/…
https://www.amazon.com.au/dp/B09N8MTJGH/

Australia’s Universities: Can They Reform? is an indispensable counterweight to reports commissioned by trade associations, staff unions, the government, and the universities themselves. Its independent analyses offer a sneak peek into the inner workings of the university system, with a view to helping Australia avoid disaster and achieve meaningful reform. If universities are the conscience of a nation, Australia needs all the help it can get.

The Inflation Bazooka Wasn’t – Market Update 11 Dec 2021

Markets in the US had a strong end to the week, as investors reacted to the fact that November’s consumer prices gains met expectations, and continue to hope it will fall back, so easing pressure on the Federal Reserve to accelerate it taper and the timing of a rate hike.

Looking to next year, supply chain challenges will continue to drive up prices in the near term but are expected to fade as Americans shift toward more normal consumption patterns. Still, other factors, like labor constraints and housing costs, may keep inflation elevated.

The CPI report from the Labor Department showed consumer prices surged last month to a 6.8% annual growth rate, the highest reading in more than 39 years.

While that was distorted to a degree by upheavals in prices a year ago due to the pandemic, the core rate — which strips out more volatile food and energy prices – also hit a 30-year high of 4.9%. The headline rate rose by 0.8% on the month and the core rate by 0.5%, both chunky increases that suggest that companies are still able to pass on higher costs to their customers more or less at will.

CONTENTS

0:00 Start
0:17 Introduction
1:57 US CPI
4:00 Inflation – Here To Stay?
7:00 Political Reaction
7:45 Market Movements
10:29 Coffee Futures
12:03 Short Sellers Under Scrutiny
12:57 UK Markets on Plan B
15:15 You Can’t “Invest” In Crypto
17:40 China Evergrande
18:45 WCI Index Up Again
19:25 Australian Market
21:38 Summary and End

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Fragility Rules: The DFA Daily 10 Dec 21

U.S. stocks limped lower on Thursday, and the Dow erased meager gains in the final minutes of trade, ahead of an important read of consumer inflation that could deliver a fresh jolt to financial markets. Investors have moved from jitters over the impact of the omicron variant of the coronavirus that causes COVID-19 to concerns about super-charged inflation, which could influence the Federal Reserve’s plan to tighten monetary policy. The consumer-price index will be released at 8:30 a.m. ET on Friday.

The S&P 500 slipped Thursday following a three-day rally as investors weighed up positive labor market data ahead of Friday’s inflation report that could intensify expectations for a faster pace of Federal Reserve monetary policy tightening.

The S&P 500 fell 0.71%, the Dow Jones Industrial Average was flat, the Nasdaq fell 1.7%.

“The broader market is taking a breather after the run up over the last four days going into tomorrow’s consumer price index report,” David Wagner, portfolio manager at Aptus Capital Advisors told Investing.com in an interview on Thursday.

Economists forecast that the CPI Index for November rose 6.8%, up from 6.2%, led by a sharp increase in rising rents. That would the fastest pace of inflation since 1990.

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

Payments Shakedown On The Cards!

Whether you are a Buy Now Pay Later User, a Cryptocurrency holder, pay by cash or card, there are big changes ahead, as the RBA outlines some of its thinking.

https://www.rba.gov.au/media-releases/2021/mr-21-30.html
https://www.rba.gov.au/speeches/2021/sp-gov-2021-12-09.html

We look at the implications of Central Bank Digital Currencies, and the possibility that end users will have to pay to use Buy Now Pay Later services in the future.

Go to the Walk The World Universe at https://walktheworld.com.au/