There is quite a close relationship between rate hikes and cuts... The central bank could avoid the liquidity trap, Zero rates and Zero prices, and liquidity Crunch- extremes - and could help maximize gains – bad - by maintaining long-run rates which is the cost. In the short run, fundaments change little - it is safe... but with precautions... high long-run rates could delay risk, but stocks could reduce inflation effects... and much better than fixed long-run debt... One of the... forms of money supply...
Markets cannot be shielded from US Fed's predicament https://ecoti.in/4prECa74 via
The bailout is useless and loss-making banks shall declare bankruptcy sell shares and exit due to too many rate hikes and higher costs... In the long run, interest rates are going down banks and deposits are not probable for higher returns so either exit is there or more credi....t facility for more investment at margins, to adjust for inflation... There shall not be restrictions for banks' borrowings unless Fed wants... They Pay heavy taxes on the money supply... and customers too... There shall be credibility for banks and bank for credibility.., WE/US do not want systematic failure... which could be transmitted to other Regions......tell us GDP at constant prices, how much it has increased, it is adjusted for inflation... And quite encouraging for investors... Show up real GDP...
An intelligent investor makes use of others' GREED and FEAR, and He must be balanced... People shall follow what they want from the Market... Everybody WANTS the same higher profit... So where is the problem? Do the same...
Japan's inflation and depreciation are debatable... Domestic real wages are low to make exports competitive through inflation/depreciation, but is it quite stable... Stock Markey is Quite in line with other Markets... It is not that the Japanese have no inflation... According to real GDP at constant prices, adjusted for inflation, in Jan 21 the GDP was 5390000. on Jan 22 it rose 5450000, therefore goods inflation increased to 1.11%... The economy is quite stable and Japan's population is growing -0.50%... According to H-D Model in equilibrium, natural growth is equal to the actual and warranted growth rate for inflation. And, if the natural growth rate -0.50% to 1.11% total of 1.61%... It is growing more than its natural growth rate... actually triple... Developed Economies are growing more than their natural growth rates... CPI has increased 3.6%…
INDIA too is growing at a fast pace...
GDP at constant prices, nominal figures, is adjusted for inflation... Higher GDP in the current period would reflect higher inflation and vice versa. It could be the best measure of goods inflation... It shows how much the economy has produced over the base year, how much is supply, and how much demand and money inflation and expectations could be gauged by the cyclical up-downs and it forms the same pattern every year when inflation causes remain the same country-wise... UNION and C0-ORDINATION MATTER in business, the competition for a market share of INCOME and ITS DISTRIBUTION is DEMOCRACY/ECONOMICS and EQUALITY OF OPPORTUNITY... JUST, JUST...
The survey results align with the view of Fed officials, but it pushes back on traders who amped up bets on rate cuts for this year - sending Treasury yields sliding - even after Wednesday's hike and Fed Chair Jerome Powell's subsequent comments. Fed underscored that a status quo could be the next move and only one more rate hike is on the cards this year if there could be, this is March... It had a dovish tilt on inflation and interest rate... Bond yields have gone down...
The yield-curve inversion phenomenon has gripped financial markets ever since inflation soared, pushing up interest rates sharply as a combat measure and creating fears of the global recession. ET Prime decodes the implications of this bond market anomaly in the backdrop of SVB collapse.
When short-run rates increase risk-free debt safe haven dwindles because people run after short-run higher returns... Natural run on deposits... you borrow less and you lend less due to uncertainty in deposits and long-run rates at a higher risk of higher cost... Higher short-run rates increase expectations of higher long-run rates... for financial stability... in the demand and supply of loanable funds...
Downside macroeconomic risks to the UN's projection include rising inflation, high-interest rates, growing public debt, and a generally precarious geopolitical environment.
We need an organization along the lines of OPEC for improving farmers' plight in large economies like INDIA. Oil prices are creating much uncertainty for the country and the whole WORLD which could be an opportunity to increase demand and exports to big cereal exporters like US and INDIA. Higher real wages in agriculture could increase export demand and growth for the global economy. Higher oil prices must be paid through higher cereal prices...
"Definitely, we would like to see that rupee trade also happens, particularly those countries which are facing issues," Barthwal told reporters here, replying to a specific question if India will be looking at the upcoming G-20 meeting of the trade and investment group as a platform to boost rupee trade.
If everybody has a job free trade is no problem... Creating employment is a bigger macroeconomic goal than exchange rate stability and CAD due to higher imports.
The "Big 5" consisting of Reliance Group, Tata Group, Aditya Birla Group, Adani Group, and Bharti Telecom have grown at the expense of smaller local firms, said Viral Acharya who was Reserve Bank of India deputy governor between 2017 and 2019. At the same time, the government's "sky-high tariffs" have shielded these conglomerates from the competition by foreign firms.
Smaller Firms could not weather price competition by larger companies. Perfect competition could be cutthroat. Tariffs have protected domestic companies. Employment and lower prices could help increase demand and growth but could flush small firms without investing power at low rates. Competition sometimes could be fierce.
1 day ago
