What are market bubbles and how are they formed?
Trade Wars – When Nash Equilibrium meets Deglobalization
What is a bubble? A bubble is a type of economic cycle characterized by an immediate increase in market value, notably in asset prices. This rapid inflation is followed by a rapid decline in value, sometimes known as a “crash” or “bubble burst.” A bubble is often formed by an increase in asset values caused […]
The Future of U.S. Rate Regime: FED’ s Challenges
Trade war – noun – “a situation in which countries try to damage each other’s trade, typically by the imposition of tariffs or quota restrictions.”. The US-China trade war, despite the looks of being surging now, it has already started by 2016 when Donald Trump was fighting for presidency: “Any country that devalues their currency […]
European Reflation: All that Glitters ain’ t Gold
The Monetary Divergence The Federal Reserve, as widely expected, announced on March the 15th that it intends to raise interest rate to 0.75% to 1%, up from the 0.5% to 0.75% range set in December 2016. This is the third rate hike from the FED since the financial crisis. The Federal Open Market Committee (the FOMC, the interest rate-setting body […]
Annual inflation in the Eurozone has surged to its highest levels since 2013. Having already hit 1.1% in December 2017, it has now jumped to 1.8% in January 2017, according to Eurostat. Despite the consumer price growth acceleration, the European Central Bank insists that the aggressive monetary stimulus must continue. Draghi’ s attention is focused on […]