The bailout agreement extended last February between Greece and its international creditors expired yesterday. Having failed to obtain international financial help to pay a scheduled €1.6 billion payment to the International Monetary Fund (IMF), Greece now stands effectively in default. Athens has implemented capital controls, including bank closure to prevent a bank run, and could delay payment of domestic obligations, including pension payments, for a limited time while it seeks alternative means to obtain financial aid. Read more about Tension Rises as Greece Misses IMF Payment 07-01-15
Earlier this week, optimism that Greece and its international creditors would reach a deal rose after Athens submitted new proposed reforms, including multiple tax hikes, to the Euro Group (euro zone financial ministers). Not surprisingly, Greek leaders described the new measures as “harsh.” Read more about Down to the Wire 06-24-15
The Fed’s rates announcement today continued the central bank's recent theme: using dovish language to say that higher rates are coming. The message that Fed Chair Janet Yellen wants to get across: that the September hike is well on its way, barring unforeseen circumstances.
The subtlety shown by the Fed duplicates its previous characteristic, namely a noncommittal look forward; wary of potential both to instigate market contraction and of unexpectedly weak or shaky U.S. growth for the year, policymakers leave themselves wiggle room to adjust future policy as they see fit. Read more about Fed Speaks on Rates 06-17-15
U.S. stocks are green across the board today, ending a four-day losing streak and booking their best day in more than a month. Greece remains at the forefront of investors’ minds as negotiations to unlock loans head into the final days before the four-month bailout extension reached in February expires at the end of this month. Both sides have rejected the other’s proposals so far, seemingly setting up another final-hour showdown. Read more about Where There's a Will... 06-10-15
The Commerce Department revised its first-quarter GDP growth estimate to negative 0.7 percent (annualized), well below the initially reported, and already weak, 0.2 percent gain estimate issued one month ago. A worse-than-expected trade deficit, blamed on the strong greenback, sapped 1.9 percentage points from GDP in the first quarter, and was at the root of the decline and the sharp downward revision. However, even if the impact of the trade deficit were excluded, growth in the March quarter was still anemic, not helped by the frigid winter. Read more about Holding Pattern 06-03-15