Hints and tips:
...To arrive at that number the strategists aim to replicate the Fed Board’s financial conditions index, rather than the overrated proprietary FCIs that almost everyone appears to have developed....
...Second, the FCI-G includes the Zillow monthly index of house prices and mortgage rates, which our FCI does not include....
...If we are right about the economic outlook, the recent easing in financial conditions has further to run, which would reinforce the positive FCI growth impulse for 2024 and could result in further upward...
...There was the Bloomberg FCI, Citi FCI, Deutsche FCI, Goldman Sachs FCI, Kansas City Fed Financial Stress Index, Macroeconomics Advisers Monetary and Financial Conditions FCI and the OECD FCI....
...Fans of US political history will know this wasn’t just about Nixon wanting to keep an eye on the latest FCI....
...Moreover, adjusting our broader financial conditions index (FCI) for inflation rather than the funds rate has very little impact on the implied impulse to GDP growth, which is now modest....
...However, the limited refinancing needs since the start of the Fed’s tightening cycle suggest that the impact of higher interest rates on growth is more delayed than the average historical impact that our FCI...
...Here’s his explanation of the chart from the note, with our emphasis: Although 50% of the cumulative effect of a US FCI shock on the level of GDP is realised within 2 quarters, the impact on other indicators...
...There’s actually been plenty of wheat in the country, but mismanagement of procurement has left the FCI suddenly scrambling to meet its needs....
...When 3i (or its early incarnations ICFC and FCI) was created in 1945, Britain had no venture capital and private equity industry to speak of....
...Equities agree with the signal from FCI [financial conditions indices], which argues for some stability and then recovery in growth next year.”...
...Any long-term setback in the trade talks could lead to a tightening in the FCI, which could cause the Fed to consider rate cuts....
...This chart from BlackRock shows the rate of gross domestic product growth implied by their financial conditions indicator (FCI) for the eurozone....
...However, none of the commonly used financial conditions indices (FCI) takes collateral velocity into consideration (Singh, 2017)....
...Financial conditions indices (FCIs) have tightened throughout 2018 as the dollar has strengthened, bond yields have risen alongside short rates and, lately, equity prices have plummeted....
...This may explain the recent slowing in domestic demand, but the FCI is expected to ease sharply in the near future....
...So far, the effects on the Fed’s FCIs have been small. If the Fed’s message is mildly tilted towards a dovish reaction to the tariffs, interest rates will still remain on a gradual upward path....
...growth, unless they impact the FCI as an intermediate step....
...Currently our EM FCI is at its easiest levels since 2012, with the steep easing year to date accounting for most of that decline. Read more: April 13: EM FX rally: what next?...
...purchase of FCI Asia that was completed on Friday....
...This means that the large tightening shown in the standard FCI may be the more relevant measure in this episode....
...There is, however, a catch-22 with any attempt to use the FCI as a guide to setting monetary policy....
...The index suggests that there has been a tightening of about 250 basis points in the FCI since the dollar rise started in mid 2014....
...The electrical components maker rose 2 per cent to $56.84 after it sealed a deal to acquire Singapore-based FCI Asia for $1.28bn to strengthen its telecom products business....
...According to Goldman Sachs, the pioneers in this field of analysis, the FCI has tightened by almost 75 basis points since the July FOMC meeting owing to the stronger dollar, lower equity prices and widening...
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