Daily Note – Fed fears

Dublin DocksSummary

Corporate finance views

US rate rises – someone has to be wrong!

United States: Retail Sales hit by weather

China: Economy being pumped with liquidity

 

Good morning,

Am writing from the very swanky Marker Hotel in Dublin’s docklands on a glorious morning, making me feel like I am somewhere considerably more exotic. I am here to chair a corporate finance conference, which will involve small independent financial boutiques from all over the world. These are the sort of gatherings where you can really find out what is happening on the ground – miles away from financial markets – from people who are making investment decisions every hour or everyday.

I will keep you updated.

When I send out my daily note, I normally get between 10 and 30 responses from clients who agree, disagree or want to discuss the topic further. When I discuss what will happen if or when the Fed increase interest rates later this year, I will get 10 times the normal response.

When the Fed hike rates some clients believe that equities will fall and credit spreads will widen. Other clients believe the opposite will happen. Other clients again believe the yield curve will steepen and because the euro area is now experiencing a solid recovery, the dollar will go down from here. Another group of clients think that long rates will go down as we get closer to lift-off because there are still no signs of inflation and hence, the Fed lift-off will be perceived as a deflationary policy mistake.

And many of the responses I receive come with strong opinions!

Download a FULL PDF version of the Daily

Global Macro-Daily Note 13th March 2015

Disclaimer

The statements, opinions and analyses presented in the articles, newsletters, and other materials appearing on this website are provided as general information and for educational purposes. Opinions, estimates and probabilities expressed herein constitute the judgment of the author as of the date indicated and are subject to change without notice. Nothing contained in this website is intended to be, nor shall it be construed as, investment advice, nor is it to be relied upon in making any investment or other decision. Prior to making any investment decision, you are advised to consult with your broker, investment advisor or other appropriate tax or financial professional to determine the suitability of any investment. David McWilliams shall not be responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided.



Categories: Daily Note

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