Travel to Financial Success

This is today's headline news on  bartchart.com : "March 10-year T-notes (ZNH24) this morning are up by +8 ticks, and the 10-year T-note yield is down -3.7 bp at 4.227%.  T-notes  shook off early losses today and  are slightly higher on some Fed-friendly economic news ." Fed-friendly economic news While the Federal Reserve considers many factors when making monetary policy decisions, there are four key factors that seem to have influenced the market's perception of "Fed-friendly" economic news this morning: Inflation: The January core PCE deflator, a key inflation measure, rose at the slowest pace in 2-3/4 years . This suggests easing price pressures , which aligns with the Fed's goal of price stability. Labor Market: Weekly jobless claims rose more than expected , indicating a potential softening of the labor market . This could be seen as a positive by the Fed, as they are looking to balance inflation control with maintaining full employment.  Purcha...

(Updated 07/21/2018) (Bloomberg) The currency war has arrived as the U.S. and China open up a new front in their increasingly acrimonious game of brinkmanship. The repercussions could threaten the global financial order. Supply-and-demand, inflation , interest rate differentials , purchasing power parity , and other economic factors will cause changes to a currency's relative worth. [1,29] For example, a country's currency tends to appreciate under the following conditions: Less accommodative monetary policy  or fiscal austerity [13] by Raising interest rate For example, Fed Chief Paul Volcker hiked interest rates to fight off inflation during the 1970s and early 1980s and subsequently the dollar surged 78% from June 1980 to December 1984. Under the best practices, governments are encouraged to use interest rate tools rather than manipulate the exchange rate.  Slashing budget Stronger economy Recently, the dollar surged to its highest level in nearly s...