While the pace of bank M&A transactions in 2018 has been on par with the same period in 2017, deal valuations are on the rise. During the first quarter, the aggregate value of all announced bank deals was $4.08 billion, down sharply from $9.08 billion a year earlier
US Federal Reserve
No one enjoys paying taxes, so news of tax cuts is warmly welcomed. In December, the US government passed a tax act that sharply reduces rates across the board, most significantly for businesses. It would seem to represent a boon to the US economy—but with the economy already charging ahead at full steam, will it in the long run be a blessing or a bane?
Latin America under Tightening Global Liquidity Conditions: Emerging Markets in a Changing Global Environment
With economic growth returning to the developed world, the end of years of quantitative easing and easy monetary policy is in view; inflation concerns are reviving, guaranteeing rising interest rates along with tightening liquidity. Emerging markets in Latin America are benefiting from higher commodity prices, and despite some political tensions are proving to be an increasingly attractive destination for investor funds.
The US dollar is the world’s reserve currency, the representation of US economic might on the global stage and the de facto currency unit for the overwhelming majority of financial assets.
Landlocked Bolivia is viewed as South America’s poorest country, but its fortunes may be turning for the better. The government plans to nearly double its coca production but also further develop what is purported to be the earth’s single-largest reserve of lithium, a light metal used in batteries, which is experiencing skyrocketing demand. Bolivia could be on the cusp of a rags-to-riches rebirth.
The battle between the globalists and the populists has captivated people around the world, including investors, who are today inclined to place political news ahead of the more tried-and-true economic indicators in making decisions. Despite the turmoil in politics, though, many leading economies, especially that of the US, are doing rather well, with no major storms on the visible horizon.
During his campaign, US President Donald Trump was short on praise for Federal Reserve Chair Janet Yellen. But since taking office in January, he has softened his public remarks about her low interest-rate policies, and there is even the possibility that he might re-nominate her in 2018. Would the reappointment of an avowed monetary-policy dove work for or against his economic plans in the future?
Trying times can inspire groundbreaking reform, and today’s economic climate may demand a radical strategy. Approaches such as universal basic income, deposit accounts held at central banks, and monetary policy through direct transfers may be what is needed to effectively address stubborn conditions that could turn perilous in the days ahead.
At the beginning of 2017, the European Central Bank (ECB) confirmed that it will keep its benchmark rate unchanged at 0 percent and its deposit rate at -0.4 percent. To sustain European economies, the ECB will also continue its bond-buying program with 80 billion euros (US$85 billion) per month until the end of March.
United States President Donald J. Trump received an unexpected valentine last week from Janet Yellen, chair of the Board of Governors of the Federal Reserve System. The higher interest rates President Trump pledged through jawboning the Federal Reserve are coming.