Fed Policy: Why Do Rates Hikes Hurt Stock Markets?

Fed Policy: Why Do Rates Hikes Hurt Stock Markets? On December 18th, the Federal Reserve announced a rate hike of 25 basis points. For the U.S. economy, this is the fourth increase of 2018 and it brings the Fed funds rate to a range of 2.25% to 2.5%. ┬áThe move came despite strong opposition from … Continue reading Fed Policy: Why Do Rates Hikes Hurt Stock Markets?

Financial Markets: What Is The Price To Earnings Ratio?

Financial Markets: What Is The Price To Earnings Ratio? For those without experience, the stock market can seem like a complicated entity. ┬áBut the reality is that most of the strategic conclusions that are drawn by hedge funds and other large investors can be boiled down to relatively simple math equations. One example is the … Continue reading Financial Markets: What Is The Price To Earnings Ratio?

Relation between Inflation and Interest Rates (graph)

A number of people and students wonder about the relationship between inflation rate movements and the quarterly interest rate (nominal and real interest rate). Here are observations based on Canadian data over a 50 years period that tracks T-Bill interest rate, consumer price index, and real interest rate.

Introduction to Macroeconomics – Some key terms

Economics: The Study of how society deals with scarcity. Here is a brief article on the introductory components of any economy with a macroeconomic slant. In the economy we expect to find these four components: resource endowment, technology, preference, institutions. Some key terms that you should be aware of include:

Bank of Canada Keeps Overnight Interest Rate at .5% for 3rd Quarter

The Bank of Canada announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is 3/4 per cent and the deposit rate is 1/4 per cent. Although inflation is heading back to a 2% target by next year, the global economy continues to show signs of weakness. … Continue reading Bank of Canada Keeps Overnight Interest Rate at .5% for 3rd Quarter

National Income Accounting Explained

Including Intro to Balance of Payments Here is a brief tutorial to aid newbie economists understand the constructs behind national income accounting and balance of payments (the two are related). To do so we’ll introduce the two measures of national income which most of you are familiar with: GDP (gross domestic product) and GNP (gross … Continue reading National Income Accounting Explained

Federal Reserve Increases Overnight Rate to .5%

The federal reserve today increased the overnight lending rate by a quarter percentage to 1/2 a percent. This is the first increase in nearly a decade dating back to 2006. Increasing the benchmark rate is an indicator that the American economy is starting to not only improve but is becoming resilient as well. The increase … Continue reading Federal Reserve Increases Overnight Rate to .5%

Alberta to Bump Minimum Wage Starting in October

Business’ may cry foul, but Alberta, despite being one of the wealthiest provinces in the country, when the oil price is high, has the lowest minimum wage in Canada. The affects on the economy will be negative, say small business owners and service related industries. Of course, every argument has two sides. Here are some … Continue reading Alberta to Bump Minimum Wage Starting in October