FED

How Trump’s nominee for the Fed could turn central banking on its head

President Donald Trump on July 10 nominated Randal Quarles to be one of the seven governors of the Federal Reserve System, the central bank of the United States.

Before I get to Quarles and his qualifications, it’s important to understand the Fed and what it does. Its decisions are vital to every person on the planet who borrows or lends money (pretty much everybody) since it has enormous influence over global interest rates. Its board of governors also influences most other aspects of the global financial system, from regulating banks to how money is wired around the world. Continue reading →

Fed interest rate hike may have less of an impact than you think

There is a very high chance the Federal Reserve will raise interest rates next week.  It would be the first time the Federal Open Monetary Committee (FOMC) – the Fed’s rate-setting team – has lifted its benchmark rate since 2006, beginning the so-called return to normal.  Economists, traders and policymakers have been pontificating, prognosticating and placing bets about this decision for a long time, because the impact is expected to be far-reaching.

So how will higher rates affect you? Continue reading →

Why do stocks fall when the Fed considers raising interest rates?

A top-level committee of the Federal Reserve, the US’ central bank, is meeting this week to discuss when it should begin raising interest rates.  Why do stock prices fall when a country’s central bank boosts interest rates?

Continue reading →