A short posting to clarify the few commonly used terms in interest rates as they can be confusing! Fed Fund Effective Rate – All US banks maintain reserves at the Fed. If reserves of Bank A run below the legal minimum, A may borrow funds from B (these funds are also held in reserve at [...]

Fed Funds, Interest rates, LIBOR Hide

Indonesia’s central bank may refrain from raising interest rates from a record low this week, betting that inflation isn’t yet enough of a threat to require higher borrowing costs. Bank Indonesia will keep its reference rate unchanged at 6.5 percent for an eighth straight month tomorrow, according to 16 of 17 economists in a Bloomberg [...]

forex, inflation, Interest rates Hide

March 30 (Bloomberg) — Greek seven-year notes fell in the first day of trading and an auction of 12-year bonds garnered demand for less than half the debt offered on concern Europe’s most indebted nation will keep struggling to fund itself. The drop drove yields on the 5 billion euros ($6.7 billion) of seven-year notes [...]

debt, Euro, Euro Zone, greece, Interest rates Hide

Subprime-mortgage securities are rising at an accelerating pace as the U.S. begins to encourage reductions to homeowners’ balances, which may lead to fewer foreclosures and a quicker end to the housing slump. A Markit ABX index of credit-default swaps tied to 20 subprime-loan bonds rated AAA when created in the first half of 2006 climbed 3.2 [...]

debt, recovery, subprime, US Hide

Feb. 9 (Bloomberg) — Since its inception, the derivatives market has echoed the fairground hawkers’ call to “scream if you want to go faster.” Among the new derivatives, collateralized-debt obligations (CDOs) were particularly hot. To make a CDO, bankers bundle together a package of other kinds of securities, such as corporate bonds, asset-backed securities (ABSs) [...]

structured products, subprime, US Hide

THIS year, bond unit trust funds will continue to be an important component in an investor’s portfolio although their performance will be tied to the global economic scenario. When the economy is weak or is heading towards a recession, bonds will generally outperform equities as investors flee for safety asset class. But during an economic [...]

bond funds, bonds, investments Hide

It was the age of zeroes, the epoch of naughts, an era when we started with something and added just about nothing. At least that’s what stock market commentators have been gravely telling us for at least a year. The 2000s, they argue, was a lost decade. And at first glance, they appear to have [...]

bonds, diversification, investment returns, investments, savings, stock market Hide

A belief that economic tumult has not completely passed and that the Federal Reserve is unlikely to make any dramatic rate moves has unexpectedly driven investors into Treasury auctions this week, bond experts say. Sales this week of 2-, 5- and 7-year US Treasury notes fetched higher demand than many analysts anticipated. The latter two [...]

bonds, debt, federal reserve, investments, market, security, treasuries, US Hide

Treasuries were the worst performing sovereign debt market in 2009 as the U.S. sold $2.1 trillion of notes and bonds to fund extraordinary efforts to bolster the economy and financial markets. Investors in U.S. debt lost 3.5 percent on average through Dec. 30, according to Bank of America Merrill Lynch indexes, the biggest annual slide [...]

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Dec. 7 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke said the U.S. economy faces “formidable headwinds,” including a weak labor market and tight credit that are likely to produce a “moderate” pace of expansion. “The economy confronts some formidable headwinds that seem likely to keep the pace of expansion moderate,” Bernanke, 55, said today [...]

Interest rates, unemployment, US Hide