The US Federal Reserve gave us front row seats last week to what the new normal for global monetary policy may well look like – and it’s positive news for emerging markets. Well, those who don’t shoot themselves in the foot anyway.
Looking forward, last week’s meeting confirmed the Fed’s decision to remain patient . Its much-anticipated dot plot reflects its plans to maintain official interest rates at current low levels until economic evidence suggests otherwise. With the Fed still setting the tone for global monetary policy and other developed markets also feeling downward economic pressure, it seems the lower-for-longer interest rate environment is likely to prevail for at least the next couple of years.
For emerging markets, low developed world interest rates mean the global search for higher yields will be a feature of financial markets for the foreseeable future, underpinning investments into emerging markets. Those emerging markets that are politically stable and have healthy economies stand to benefit most from this turn in the global tide.
There’s been much debate about the risk of US following in Japan’s footsteps into secular stagnation. The risk is that with such low short-term interest rates, the US has very little leeway to reduce interest rates enough to reboot the economy. During the past three recessions, the Fed took five percentage points off interest rates during each cycle to stimulate the economy. But with the Fed Funds Rate at 2.
Big central bank balance sheets mean still elevated liquidity levels in the system looking for potential places to land. Moody’s South African rating decision this week will give investors a temperature reading to go on. Although the extensive load shedding of the past few weeks is a worry, it is unlikely to tip the balance and the rating agency is still not expected to downgrade South Africa to sub-investment grade.
Resumimos esta notícia para que você possa lê-la rapidamente. Se você se interessou pela notícia, pode ler o texto completo aqui. Consulte Mais informação:
Portugal Últimas Notícias, Portugal Manchetes
Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.
MAVERICK BUSINESS ANALYSIS: South Africa’s enterprise sector critically illThe parlous state of the enterprise sector in SA can be seen in dismal company income tax receipts over the past five years, which are declining and very heavily weighted in favour of large companies. The decline in profitability means 74% of all companies pay no tax at all and the vast majority of company tax receipts come from just 0.09% of SA’s corporates.
Fonte: dailymaverick - 🏆 3. / 84 Consulte Mais informação »
BUSINESS MAVERICK : China and the US: Xi and Trump miss their chance for meaningful trade reformsWhile Chinese President Xi Jinping appears to care only about maintaining political control, US President Donald Trump seems to care only about himself.
Fonte: dailymaverick - 🏆 3. / 84 Consulte Mais informação »
MAVERICK BUSINESS: The Purple Cow’s basic income plan is either genius or a bovine pattyThe Negative Income Tax, says the Capitalist Party of South Africa’s Kanthan Pillay, ‘is our riposte to the constant clamour for the Basic Income Grant’. It is a proposal, he says, to conquer unemployment, especially in the light of the effect on jobs of the Fourth Industrial Revolution. Unemployment too high for it to be viable 😕
Fonte: dailymaverick - 🏆 3. / 84 Consulte Mais informação »
BUSINESS MAVERICK: Take more savings offshore, money managers urge SA investorsIncreasingly, financial advisers are recommending that SA investors take as much of their discretionary investments out of the country as they can. But is taking 100% of your investment income out of the country sensible, never mind unpatriotic?
Fonte: dailymaverick - 🏆 3. / 84 Consulte Mais informação »
BUSINESS MAVERICK OP-ED: Why do financial markets overreact to bad news?We live in the era of the 24-hour news cycle. Corporate issues make the headlines and then rumbleon and on, taking new turns and causing more damage as company responses are analysed in minute detail. Sometimes, major incidents beget huge crises where significant investor responses are justified. In others, we often get the feeling that markets go over the top.
Fonte: dailymaverick - 🏆 3. / 84 Consulte Mais informação »
Business: One by One, Global Bond Markets Are Flashing the Same WarningBond yields in Australia and New Zealand dropped to record lows on Monday, after a closely-watched part of the U.S. curve inverted for the first time since 2007 on global growth woes.
Fonte: dailymaverick - 🏆 3. / 84 Consulte Mais informação »
Banks’ branch closures point to need for new business modelSA must focus on changing the work environment so jobs aren’t lost when branches close.
Fonte: TheCitizen_News - 🏆 6. / 75 Consulte Mais informação »
BUSINESS MAVERICK: Rating agencies are likely looking for changes larger than South Africa’s political system can deliverThe language of rating agencies is often obscure; publicly Moody’s talks about ‘persistent structural challenges’ and the risk of ‘fiscal slippages in the face of both slower growth and increasing political pressures’. What this means is that they are looking for some substantial and fast policy changes, probably larger than SA’s political system can manage.
Fonte: dailymaverick - 🏆 3. / 84 Consulte Mais informação »
MAVERICK BUSINESS: Capitalism’s elusive magic number: A prevailing real interest rate that kills two birds with one stoneToday’s free marketeers attribute the failure of inflation to rise, despite wage growth and low unemployment, to a new normal — a new “natural” inflation rate. With their Panglossian blinders, whatever they observe is assumed to be the most natural outcome in the most natural of all possible economic systems..
Fonte: dailymaverick - 🏆 3. / 84 Consulte Mais informação »
MAVERICK BUSINESS: Investing in the future does not come cheap, but Sasfin is confident its three-pronged strategy will pay offTime will tell how Sasfin’s fintech investments will play out, but CEO Michael Sassoon says the internal rate of return on realisation on investment looks positive. In the interim, Sasfin is starting to reap the fruits of the other significant strategic steps it has taken.
Fonte: dailymaverick - 🏆 3. / 84 Consulte Mais informação »