30 Jul 2015

Get Out Your Smelling Salts: The Fed Speaks

As expected, the Federal Reserve Open Market Committee (FOMC) left short-term interest rates unchanged yesterday. Their statement yesterday along with other comments from Fed officials imply that the Fed is on course to raise rates later this year, citing solid job gains and lower unemployment. Specifically, the statement yesterday added the word ‘some’ to a key phrase: ‘The Committee anticipates that it will be appropriate to raise the target range… Read More

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25 Jun 2015

ALM Insights – June 2015

ALM Insights is focused on banks and other institutions that use their portfolio to manage risk on both sides of their balance sheet. It takes an in-depth look at securities investment strategies, balance sheet and asset/liability strategies, regulatory topics and general economic information. To view this issue, click the image below. In This Issue: Is Bond Market Liquidity Gone? Is Janet Bluffing? Looking at Deposit Alternatives

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24 Mar 2015

ALM Insights – March 2015

ALM Insights is focused on banks and other institutions that use their portfolio to manage risk on both sides of their balance sheet. It takes an in-depth look at securities investment strategies, balance sheet and asset/liability strategies, regulatory topics and general economic information. To view this issue, click the image below. In This Issue: At Least We Aren’t Europe Bond of The Day – When Does 2% ≠ 2%? More Problems… Read More

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23 Mar 2015

The Fed’s New Drug of Choice

Even though I was out of town last week on vacation, I generally keep my ear to the ground for market news and last week that was especially true because the Fed was expected to move one step closer to raising interest rates. For at least a year, the Fed has maintained that they would be ‘patient’ about the timing of raising rates.  I assumed, like most people, that the… Read More

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9 Feb 2015

New Data for the Fed to Chew On

Economists had expected that the economy would produce 235,000 jobs in January, so at first blush, it was hard to see why markets were excited by the actual number, which was 257,000. The good news came on two fronts. First, the previous two months were revised higher by a combined 147,000 jobs, which amounts to another month of job creation (a weak month, to be sure, but we’ve had plenty… Read More

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16 Jan 2015

Central Bank Shocker

In September 2011, Switzerland’s central bank, the Swiss National Bank (SNB) decided that it didn’t want the Swiss franc to become too valuable against the Eurozone common currency, the euro. For better or for worse, the Swiss franc has been considered a safe haven and during the sovereign debt crisis a few years ago, money poured into the franc. That was a concern for the SNB since it could have… Read More

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12 Jan 2015

Finally, A Regulation You Can Opt-Out Of

In the December 2012 issue of ALM Insights, I wrote an article titled Basel III’s AFS Provision. At the time of the article, the provision detailing the effects of Accumulated Other Comprehensive Income (AOCI) on regulatory capital had been delayed due to a “wide range of views”, and the final outcome was still very much up in the air. Few in the banking industry thought that forcing banks of all… Read More

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18 Dec 2014

ALM Insights – December 2014

ALM Insights is focused on banks and other institutions that use their portfolio to manage risk on both sides of their balance sheet. It takes an in-depth look at securities investment strategies, balance sheet and asset/liability strategies, regulatory topics and general economic information. To view this issue, click the image below. In This Issue: King Dollar Finally, A Regulation You Can Opt-Out Of Reading The Tea Leaves

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18 Dec 2014

Splitting Hairs with Janet Yellen

In the new minutes, Janet Yellen and her friends at the Fed did lose the ‘considerable time’ phrase, in the sense that it had been part of a sentence that said that ‘it will likely be appropriate to maintain the zero to one-quarter percent target range for the federal funds rate for a considerable time following the end of its asset purchase program.’ In this statement, they say that they… Read More

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17 Dec 2014

New Dilemma at the Federal Reserve

The second day of the Federal Reserve’s Open Market Committee concludes later today and the big question is whether or not they will drop the term ‘considerable time’ from their forward guidance statement. The phrase has denoted how long the Fed expects to wait between the end of quantitative easing and the beginning of actual interest rates hikes. Earlier this year, Yellen indicated that ‘considerable time’ refers to six months… Read More

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