Category: News Desk

Federal Reserve Expects Gradual Inflation in 2015


The Federal Reserve expects inflation to rise gradually to 2%, leaving time for the central bank to wait before raising interest rates.

The Federal Reserve said Wednesday afternoon in a statement that low energy costs were keeping inflation muted, which was also causing the Federal Reserve to be patient before raising interest rates lest it cause disinflation to lead to outright deflation. “Inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices,” the Fed said.

Brazil’s Swaps Soar as Inflation Grips Economy


Brazil’s swap rates soared recently as an official report showing over-achieved inflation levels and the announcement of an increase in fuel prices. These developments have fuelled speculation that the country’s central bank will continue to increase borrowing costs in the coming weeks by a half-percentage point in a bid to curb rising inflation.

Brazil’s own short-term swap rates rose for the first time in five days as both analysts and investors predicted that the central bank would again increase borrowing costs.

Consumer Confidence Surges as U.S. Home Prices Rise


Home prices and home sales continue to rise, while consumer confidence unexpectedly surged to its highest point since 2007.

Consumer confidence surged to 102.9 in January, up over 10% from its December levels. According to the Conference Board, the consumer confidence index rose on improved conditions for businesses and workers, creating an expectation of higher earnings and greater spending in the near term.

Angola Struggles as Oil Prices Suffocate Revenues


Angola, the largest African crude-oil producing country after Nigeria, has turned to international lenders, including, but not limited to, major financial institutions like Goldman Sachs Group Inc. for help. The move has come as the nation probes for cash in a desperate attempt to adapt to the lowest crude-oil prices in over five years. The African country has reportedly secured over 250 million dollars, each from New York-based investment banks as well as Gemcorp Capital LLP of London.

U.S. Economy Worsens Before GDP Report


The Federal Reserve is seeing worsening economic conditions in the United States shortly before the government releases its latest report on the country’s GDP.

The Dallas Federal Reserve announced a decline in manufacturing activity and a lower outlook for economic growth in Texas, with general business activity hitting negative territory for the first time in almost two years. That index fell to -4.4 in January, down 7.9 points from the prior month and 9.4 points year-over-year.

Nigeria’s Naira Falls to Record Low


Just a day before the central bank of Nigeria was set to decide on interest and exchange rates, Nigeria’s currency, the naira, spiraled to a record 6 year-low. This dip has occurred in the wake of financial powerhouses – Morgan Stanley and Renaissance Capital – forecasting a decline for the currency. Aggravating the situation further was dangerously low oil prices.

European Stocks Extend Rally on Extended QE Comments


After several months of dismissing disinflationary trends, the European Central Bank has affirmed that it will do whatever it takes to reach its inflation target.

After prices fell in the Eurozone by 0.1% on a month-to-month and 0.2% on a year-to-year basis, the European Central Bank announced a 1.1 trillion euro asset-purchasing program last week aimed at raising inflation expectations. One day after the announcement, ECB executive board member Benoit Coeure said the quantitative easing program would extend if inflation fails to reach 2%. 

Why Fracking Bans Promote Higher Unemployment and Lower Incomes


The federal equalization program envisioned by Canada had the best of intentions. However, consequences have pushed two provinces to turn away from the most sensible economic opportunities for their areas, reducing job opportunities, incomes, and tax revenues. Two examples of this issue are the ongoing ban imposed on hydraulic fracking in Nova Scotia, and the recently imposed ban on fracking in New Brunswick.

ECB Opens Euro Fire Hose and Davos Highlights


The European Central Bank confirmed it would spend 1.1 trillion euros on asset-backed securities to fight deflationary trends throughout the Eurozone, while business leaders and politicians discussed economic trends at Davos.

The ECB announced Thursday that its program would aim at targeting deflation in the Eurozone, causing the euro to fall and European stocks to rise. Many rumors had suggested over 1 trillion euros would be committed to the program before the announcement.

Ohio Unemployment Celebrates Lowest Rate Since 2001


A boost in hiring during November 2014 helped to push the jobless rate in Ohio to its lowest level in thirteen years. The rate hit an impressive 5% in November, after coming in at 5.3% in October, according to a report released by the Ohio department of family and job services. That equates to the lowest rate since 2001, and shows a significant drop from the 7.2% figure from a year ago.