scholarly journals The Spillover Effects of Fed’s Policies with Emphasis to the Fragile Five

2014 ◽  
Vol 6 (12) ◽  
pp. 1011-1020
Author(s):  
Mehmet ORHAN ◽  
Halil İbrahim ÇELİKEL .
Keyword(s):  
Interest Rates ◽  
Foreign Exchange ◽  
Federal Reserve ◽  
Stock Exchange ◽  
Spillover Effects ◽  
Wall Street ◽  
Federal Reserve Bank ◽  
Reserve Bank ◽  
Almost All

Since the Bretton Woods Agreement, the U.S. dollar has played the role of dominant global currency. As a result, the Federal Reserve Bank has many privileges such as the ability to run trade deficits without foreign exchange reserves. In the world, foreign exchange rates of currencies are quoted against the dollar, and majority of currency trading involves the dollar. Besides, international trade in primary commodities, such as oil, wheat, gold and coffee are bought and sold in U.S. dollar. The central banks of countries hold major positions of their international reserves in dollars. Any changes in its interest rates automatically alter the revenues of all world assets. With deregulated financial markets, the spillover effects of the Federal Reserve Bank’s decisions have increased. In this paper, we examine the impacts of Federal Reserve Bank policies over the Fragile Five that is a sub group of the weaker emerging markets namely Brazil, India, Indonesia, South Africa and Turkey. We are mainly focusing on the consequences of changes in Fed’s policies on the fragile five’s basic indicators; exchange rate, interest rate, and the stock exchange indices. All Fragile Five currencies have been depreciated by about 10 to 25% after the Fed tapering decisions. In addition we test for mean and volatility spillover of Wall Street on stock exchange indices of the Fragile Five in GARCH in mean framework and document the existence of such spillovers in almost all cases.

scholarly journals ANALYSIS OF IMPACT OF YIELD, INTEREST RATES, U.S FED RATES, AND INFLATION ON PRICE OF GOVERNMENT BONDS IN INDONESIA

2020 ◽  
Vol 6 (2) ◽  
pp. 59-74
Author(s):  
Antonius Siahaan ◽  
Julius Peter Panahatan
Keyword(s):  
Emerging Markets ◽  
Interest Rates ◽  
Federal Reserve ◽  
Emerging Market ◽  
Bond Prices ◽  
Government Bonds ◽  
Federal Reserve Bank ◽  
Reserve Bank ◽  
Critical Issues ◽  
Negative Effect

Global factors are increasingly important as a cause of international capital flows. It is almost impossible for emerging markets to protect themselves from external influences on their financial markets. Indonesia as emerging market is influenced by some monetary policies adopted by the U.S Federal Reserve Bank. The plan of tapering and Fed rate increase adopted by the Federal Reserve Bank in the last three years made local currencies turned into the depreciation stage, increasing capital outflow from emerging markets. It created huge impact on government bond prices in Indonesia and can be seen through the relationship of some factors with bond prices. This research analyzes the impacts of BI rates, Fed rates, and inflation rates on six government bonds classified into three periods during November 2013 to October 2016 when tapering and Fed rates became critical issues. It finds that in all periods bond prices are significantly influenced by only BI rates, but BI rates, Fed rates and inflation rate have negative effect on bond prices during the observation period.

Wall Street Discovers Japan, Spring 1920

2016 ◽  
Author(s):  
Simon James Bytheway ◽  
Mark Metzler
Keyword(s):  
New York ◽  
Federal Reserve ◽  
New World ◽  
American Business ◽  
Wall Street ◽  
Federal Reserve Bank ◽  
Reserve Bank ◽  
Financial Power ◽  
Autumn And Winter

This chapter recounts the spring of 1920, when three of Wall Street's top bankers—Thomas W. Lamont of J.P. Morgan & Company, Frank A. Vanderlip of National City Bank, and Benjamin Strong of the Federal Reserve Bank of New York—made their own separate visits to Japan, which had suddenly emerged as a new financial power. These bankers, all ambitious to build a new world more open to American business, had already crossed paths the year before in London and Paris, where they were involved in planning postwar European affairs. Their Tokyo tour of 1920 was thus a follow-on to a European tour in 1919. Wall Street financiers subsequently became key actors in shaping US-Japan relations during the decade of the 1920s. Financially speaking, this was the beginning of Japan's first “American” age. However, this era ended abruptly and violently in the autumn and winter of 1931–32.

scholarly journals Why Are Interest Rates So Low?

2013 ◽  
pp. 1-4
Author(s):  
Joseph G. Haubrich
Keyword(s):  
Interest Rates ◽  
Recent Work ◽  
Federal Reserve ◽  
Federal Reserve Bank ◽  
Reserve Bank ◽  
Work Done ◽  
Near Future

Interest rates have been at historical lows for some time now. There are many possible reasons why that is so. We make use of recent work done at the Federal Reserve Bank of Cleveland that allows us to look at individual components of interest rates and see which are exerting the biggest influence. Knowing why rates are where they are now helps to predict where interest rates will likely be in the near future.

Book Reviews

2015 ◽  
Vol 53 (3) ◽  
pp. 679-681
Keyword(s):  
Foreign Exchange ◽  
Federal Reserve ◽  
Foreign Exchange Market ◽  
Exchange Market ◽  
Market Policy ◽  
Federal Reserve Bank ◽  
Reserve Bank ◽  
Market Intervention ◽  
Us Intervention ◽  
Foreign Exchange Market Intervention

Jeffry Frieden of Harvard University reviews “Strained Relations: US Foreign-Exchange Operations and Monetary Policy in the Twentieth Century”, by Michael D. Bordo, Owen F. Humpage, and Anna J. Schwartz. The Econlit abstract of this book begins: “Explores the evolution of US policy regarding currency market intervention and the interaction of currency market policy with monetary policy, and explores this evolution by drawing on foreign exchange transactions conducted through the Federal Reserve Bank of New York between 1962 and 1995. Considers how changing economic and institutional circumstances and political and bureaucratic factors affected foreign exchange policy. Discusses the evolution of US foreign exchange market intervention—thesis, theory, and institutions; exchange market policy in the United States—precedents and antecedents; introducing the Exchange Stabilization Fund, 1934-61; US intervention during the Bretton Woods era, 1962-73; US intervention and the early dollar float, 1973-81; US foreign exchange market intervention during the Volcker-Greenspan era, 1981-97; lessons from the evolution of US monetary and intervention policies; and foreign exchange market operations in the twenty-first century.” Bordo is a Board of Governors Professor of Economics at Rutgers University. Humpage is a senior economic advisor in the Research Department of the Federal Reserve Bank of Cleveland. The late Schwartz was a research associate of the National Bureau of Economic Research.

scholarly journals Do federal reserve bank presidents have a regional bias?

2015 ◽  
Vol 40 ◽  
pp. 173-183 ◽  
Author(s):  
Alexander Jung ◽  
Sophia Latsos
Keyword(s):  
Federal Reserve ◽  
Regional Bias ◽  
Federal Reserve Bank ◽  
Reserve Bank

The Federal Reserve Bank of Richmond

1942 ◽  
Vol 22 (4) ◽  
pp. 431
Author(s):  
S. Donald Southworth ◽  
C. G. Coit
Keyword(s):  
Federal Reserve ◽  
Federal Reserve Bank ◽  
Reserve Bank
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