EUR/USD
Dec 15, 2015 at 12:18
Janet Yellen is guiding the Federal Reserve towards its first rate rise in a decade armed with traditional economic models that some economists worry could fail her in a world of massive money printing and near zero rates.
The 69-year-old economist argues the time is coming for a rate-lift-off even though inflation has yet to accelerate, trusting decades of studies that suggest a tight labor market eventually creates inflationary pressures.
It is a risky wager considering that global inflation is at historic lows and many central banks remain in an easing mode as their economies struggle to get any traction.
If she is right, Yellen, who has already presided over the end of the Fed's bond-buying stimulus program, will cement her reputation and that of her 'dashboard' that relies on long-established relationships between jobs, wages and prices.
If she is wrong, the Fed could join the European Central Bank and the central banks of Sweden, Israel and Canada, which have all tried, but failed, to escape the drag of zero rates in the wake of the 2007-09 financial crisis.
There are reasons to doubt conventional economic theory. Many economists predicted a spiral of falling prices when the U.S. jobless rate soared during the crisis and then thought inflation would rise when unemployment plunged. Neither happened, though Yellen has maintained this year that the Fed was on course for rate increases, which would be 'data dependent,' likely gradual, and with no pre-set path.
This shows Yellen 'is grounded in traditional modeling but she is well aware that there is uncertainty,' said Randall Kroszner, who served with Yellen as a Fed governor between 2006 and 2009.
'It is possible, though unlikely, the traditional models are just all wrong (and) we're in a whole new world. But she's not going to fly by the seat of her pants,' Kroszner said.
Yellen has made clear that models only serve as guideposts in a complicated decision-making process.
The 69-year-old economist argues the time is coming for a rate-lift-off even though inflation has yet to accelerate, trusting decades of studies that suggest a tight labor market eventually creates inflationary pressures.
It is a risky wager considering that global inflation is at historic lows and many central banks remain in an easing mode as their economies struggle to get any traction.
If she is right, Yellen, who has already presided over the end of the Fed's bond-buying stimulus program, will cement her reputation and that of her 'dashboard' that relies on long-established relationships between jobs, wages and prices.
If she is wrong, the Fed could join the European Central Bank and the central banks of Sweden, Israel and Canada, which have all tried, but failed, to escape the drag of zero rates in the wake of the 2007-09 financial crisis.
There are reasons to doubt conventional economic theory. Many economists predicted a spiral of falling prices when the U.S. jobless rate soared during the crisis and then thought inflation would rise when unemployment plunged. Neither happened, though Yellen has maintained this year that the Fed was on course for rate increases, which would be 'data dependent,' likely gradual, and with no pre-set path.
This shows Yellen 'is grounded in traditional modeling but she is well aware that there is uncertainty,' said Randall Kroszner, who served with Yellen as a Fed governor between 2006 and 2009.
'It is possible, though unlikely, the traditional models are just all wrong (and) we're in a whole new world. But she's not going to fly by the seat of her pants,' Kroszner said.
Yellen has made clear that models only serve as guideposts in a complicated decision-making process.
"They mistook leverage with genius".
Dec 17, 2015 at 15:22
Did a long trade off the Asian bottom retest ,as I was saying earlier we might get a retest,which we did,price hit the upper BB,closed trade with points in the bag,Some times this is to easy and other times your view is wrong.
"They mistook leverage with genius".
keith Mellor (Sceadagenga)
会员从Jan 31, 2014开始
83帖子
Dec 24, 2015 at 10:45
New Year - New Moves
Si eius XCIX% Ius ergo est Nefas - Sileo processus (If its 99% Right then it is Wrong - Restart the process)
Dec 24, 2015 at 20:30
It's time to relax,put your feet up and have a beer,it's been a good year considering the shaky markets,hope you all have a prosperous New Year.No positions open over the Christmas period,I think there will be some bargains New Year.New project to get started with chasingreturns.com
Be lucky!
Be lucky!
"They mistook leverage with genius".
Dec 29, 2015 at 14:09
We got a push to the downside,I placed a long position on eur/usd @ 910 ,I have a stop loss at 900,the reason im going long ,1 stocks are to open higher,2 gold is going up,Oil is up,Wall street is under pressure to deliver a year end rally.Lower BB was broke ,this might be the start of an up trend,we shall see if the open has any effect.
"They mistook leverage with genius".
Dec 29, 2015 at 16:51
On the 4 hour chart there is support at 870,no major change on European close which suggest to me more weakness if we get a lower level than the 4pm spike down depending on how many points its breached by,we could see a reversal,seeing a bit of an up trend at the moment,wise move at 4pm ,lets see how many point we can grab this time.
"They mistook leverage with genius".
会员从Jan 25, 2015开始
4帖子
Dec 30, 2015 at 07:30
I Sold short @1.092 looking to grab about 20-25 pips there. Thinking its going to retest that 870 level soon
Jan 04, 2016 at 02:18
Good morning guys ,hope you had a great New Year!
Did a long position on eur/usd at 1.15 ,8.25 level it didn't hit the 820 level,sold at 862,the news don't look so hot for US.
I will see what happens over night at London open.
Did a long position on eur/usd at 1.15 ,8.25 level it didn't hit the 820 level,sold at 862,the news don't look so hot for US.
I will see what happens over night at London open.
"They mistook leverage with genius".
