The End of the Beginning for QE in the US...?

Generali

ILW wrote: »

Odd the way markets now go belly up on the idea that things are getting better.

Higher interest rates make bonds and shares less valuable. If it appears that interest rates are likely to rise, prices are bound to fall.

Thrugelmir

purch wrote: »

Yes, I am fully aware of that.

The Fed will not substantially reduce it's asset buying program until unemployment is below 7%, and it will not reach that level anytime soon. In fact there is quite a lot of evidence that it will rise before it falls again.

Still be pumping in $75 billion a month..........

The global economy is on steroids currently.

Interest rates have being edging up since May in the US.

Generali

purch wrote: »

The Fed will not substantially reduce it's asset purchase program until the unemployment rate falls below 7%

The unemployment rate will not be falling below that level anytime soon.

Unemployment rates rise in most US states in July

http://www.cnbc.com/id/100974182

Jobless picture is worse than you think: Gallup

http://www.cnbc.com/id/100981153

US unemployment is 'only' 7.4% so not far to go.

IronWolf

lvader wrote: »

Unlike here the fed have the added issue of inflation coming in consistently below target, they are basically on the verge of deflation.

the US CPI figures are a nonsense though.

Generali

IronWolf wrote: »

the US CPI figures are a nonsense though.

What should US inflation be measured as do you think?

antrobus

IronWolf wrote: »

the US CPI figures are a nonsense though.

Are the US somehow not complying with the standards laid down in the ILO's CPI Manual?

sabretoothtigger

CPI has the problem in that its not a fixed measure. So its part of the whole problem which is self biased judgement.

It could be compared to share price where everyone begins to imagine better results, various indicators confirm this possibility. However theres a bottom line that eventually limits even the most theoretical business towards reality.
The problem for USA is their ability to self finance continually and affect their own results so it appears better then it is

IronWolf

Generali wrote: »

What should US inflation be measured as do you think?

For a start they should use the proper mean and not this geometric mean BS

And they more commonly report the CPI-U, which is CPI minus food and energy, like ordinary people give a f*** about CPI-U

lvader

IronWolf wrote: »

For a start they should use the proper mean and not this geometric mean BS

And they more commonly report the CPI-U, which is CPI minus food and energy, like ordinary people give a f*** about CPI-U

CPI-U includes

FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
APPAREL (men's shirts and sweaters, women's dresses, jewelry)
TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

sabretoothtigger

Good to know, is it the core inflation measure that maintains the 'clean view'

Generali wrote: »

If it appears that interest rates are likely to rise, prices are bound to fall.

Perception counts for so much in what is then true it seems.

I'm looking for the dynamic where headline rate matters far less then actual rate applicable of which no one is sure.
Then perception will not be determined by official policy but by the unofficial, the cart will overtake the horses not that politics was ever the workhorse but they have the reins ?