Economics

“The money helicopter has arrived,” Claire Jones writes in her FT Alphaville post, citing Hong Kong Finance Secretary’s announcement of a handout of HKD...

A spread of over 3.5 percentage points between US and Hong Kong Interest rate persisted for close to two months and so far arbitrage has failed to close the gap, leading to discussion of whether Hong Kong's Linked Exchange System is failing. This article, however, will explore some technical factors behind this interesting interest rate gap.

In recent months, the Global Economic Policy Uncertainty index has risen to a level much higher than periods around the 911 Terrorist Attack or the 2008 Financial Crisis, hence the conclusion that the economic policy is unprecedently uncertain now. But here is why you might not have to worry.

Inflation projections by Fed officials show that PCE inflation will not reach 2% by the end of 2025. Why the Fed expects to cut rate next year then?

The above figure shows the balance sheet of four major central banks from 2005 to 2015. Above the horizontal axis is the asset side...

Federal Reserve decided to cut rate by an supersized 0.5 percentage point. The decision finally ended the weeks-long market debate of whether the central bank would cut 25 or 50 basis points. One important thing, though, didn't reach the headline: The Fed has never been this "confused" about where the natural rate should be.

Hysteresis is referred to the hypothesis that recessions may have permanent effects on the level of output relative to trend.

The latest SESFOD shows that the credit terms offered to counterparties for both securities financing and OTC derivative transactions is further tightened.

An explainer on how Hong Kong Linked Exchange Rate System works, what Aggregate Balance is, and how interest rate arbitrage help maintains Linked Exchange Rate System.

In their recent working paper "Nonbank Lending", economists Sergey Chernenko, Isil Erel, and Robert Prilmeier provided an insightful overview of the sources and terms of private debt financing during the post-crisis period.