Posted at 10:40 AM , on March 19, 2015
The announcement made by US Federal Reserve Chair, Janet Yellen, on Wednesday was unambiguous to say the least. The word “Patience” has been dropped from the Fed statement which implies that the Fed may not wait much longer to raise interest rates in the US. The Fed surely has genuine reasons for the same. US labour data has been extremely strong and the US economy has grown at 2.2% in the December quarter after another robust 5.5% growth in the previous quarter. Of course, the Fed has a target of 2% inflation for rate hikes, which is likely to happen only if oil prices stop their free fall. But it looks like the month of June 2015 may see the first rate hike from the US Fed. Interestingly, if it happens, it will be the first rate hike by the Fed since 2006 (after a gap of a full 9 years). But firstly, why should India and other emerging markets be so worried about rising rates in the US? Continue reading
Posted at 4:57 PM , on March 16, 2015
Will OPEC go the way of other cartels in history?
The sharp fall in oil prices since June 2014 has raised serious questions about the role of OPEC. The Organization of Petroleum Exporting Countries (OPEC) has for long held complete sway over crude oil supply and pricing. The year 2014-15 proved that the OPEC was no longer pre-eminent in oil. What does this mean for the future of the OPEC? Continue reading
Posted at 12:52 PM , on February 24, 2015
“Why an adamant Germany finally relented..”
It may not be victory for the Greeks but surely it will go down as a personal triumph for Alexis Tsipras. The man, who came to power by promising to abandon austerity, has got a 4-month extension of his credit line. While it may not solve the problems of Greece, they at least have time to think, strategize and chalk out a credible game plan. But the question is why did Germany and the wealthy North finally relent? Continue reading
Posted at 7:46 AM , on February 9, 2015
Oil price bounce. But can oil prices sustain; most likely not!
The good news for oil drillers is that oil prices have risen 26% in the last month. But the bad news is that oil prices are still 50% below their June 2014 levels. In a nutshell, oil is awfully volatile and nobody has a clue as to what will happen. For example, Goldman Sachs has a target of $30/barrel while the OPEC has an estimate of $200/barrel. The price may settle somewhere in between, or so we hope! Continue reading