The Music Goes on and on

[specuvestor]

I think this is an important part that people overlooked as per my posts above... biggest challenge now for the Fed is how to normalise real rates without upsetting the markets' appetite for negative cost credit

http://www.bloomberg.com/news/articles/2...y-end-2015

“There is one point which is critical to understand,” Fischer said. “When we raise the interest rates which we will probably do one day, from zero to 25, from 25 to 50 basis points, we will be moving from an ultra-expansionary monetary policy to an extremely expansionary monetary policy.”

[greengiraffe]

Central Bank's strategy of creating wealth and hoping for flow through effects is inevitably setting stage for a wild party that will have a tearful end. With China being the latest to join the party, the whole world is going through a bubbly asset inflation party with illusive real economic and corporate earnings growth hardly justified by the rate of asset valuation appreciation. What goes up must come down and typically in highsight we will learn the lesson...

http://www.cnbc.com/id/102600775

Why Europe’s stock rally has a long road ahead
Dhara Ranasinghe | @DharaCNBC
3 Hours Ago
CNBC.com


The potential for a "great rotation" into European stocks from bonds could be on the way, given low -- or even negative -- yields in government bond markets, one equity strategist told CNBC Monday.

"We still see, particularly in Europe, the potential for a great rotation," Neil Dwane, CIO for European Equities at Allianz Global Investors, told "Squawk Box" Europe.

"We think there's over 5 trillion euros ($5.37 trillion) now of cash and bonds that yield nothing, whereas even if you just buy a European index ETF [Exchange Traded Fund] you get a yield of 3.1 percent," he said.

A 1 trillion euro stimulus program from the European Central Bank has helped drive government bond yields lower across the euro zone.

Read More If nobody likes bonds, who's buying?
Germany's 10-year Bund yield – the benchmark in Europe – yielded just 0.07 percent on Monday and could dip into negative territory this week, according to some analysts.

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.
European stocks meanwhile have put in a strong performance this year, aided by ECB quantitative easing, a weak euro and brighter prospects for the euro zone economy.

The pan-European Euro STOXX 600 index has added 18 percent to date in 2015, and surpassed a March 2000 high earlier this month. It has outpaced a 1 percent rise in the U.S.' S&P 500 index and a 12.5 percent rally in Japan's blue-chip Nikkei.

But David Owen, chief European economist at Jefferies International, was quick to quash fears that a bubble in the European equity market was not developing.

Read MoreS&P to start its correction today, analyst warns
"At the end of the day Europe is recovering and European growth is surprising on the upside, we're waiting for earnings to come through to justify the PE [price to earnings] ratio," he told CNBC. "We don't have a bubble in the equity market; there isn't an issue in terms of overvaluation of markets in general."

Asked why there was a reluctance by retail investors to put their cash into European stocks, Dwane at Allianz Global Investors said there was a feeling that an opportunity to get into the rally had been missed but this was changing.

"The retail [investment] that wants income is coming for European equity income now," he said. "The hunt for income in Europe will drive people into equities, because it's the only place where you can get any income."

[greengiraffe]

The moment of truth looms as the US Federal Reserve normalises rates
BUSINESS SPECTATOR APRIL 21, 2015 12:00AM

Stephen Bartholomeusz

Business Spectator Columnist
Melbourne
https://plus.google.com/102835625564126925526/
The IMF posed an intriguing and probably significant question in the financial stability review it issued last week: why have market shocks become amplified?

There is no single or simple answer to the question, which is increasingly relevant as the US Federal Reserve board edges ever closer to what may be a ‘‘moment of truth’’ for post-crisis financial markets: the first step to unwinding its experimental monetary policy response to the crisis and the start of the normalisation of US interest rates.

The backdrop to the question is the gradual removal of the extraordinary liquidity that the US policies of ultra-low official interest rates and quantitative easing have provided to global markets in the post-crisis period.

There is a concern that a reversal of US monetary policies, combined with the way that liquidity has been deployed, regulatory responses to the crisis and longer-term structural changes to markets could create the settings for another major market shock.

The unintended consequences of the Fed’s withdrawal from its unconventional monetary policy settings have always been the multi-trillion-dollar issue hanging over the markets, from the moment the US embarked on its grand experiment.

The 2013 ‘‘taper tantrum’’ that erupted when the Fed first hinted at an end to QE and the turmoil generated by the Swiss decision to end its tie with the euro are among the cases cited by the IMF as examples of liquidity shocks illustrating how current market settings might act as a ‘‘powerful amplifier’’ of market risk.

Part of the potential problem has been created by regulators, which have curtailed the involvement of banks as market-makers and providers of liquidity during periods of volatility. Banking systems might be safer but much of what banks once did to support market activity has been pushed out of the regulated sector and into the shadow banking sector.

Whether leveraged or otherwise, non-banks whose performance is generally assessed relative to market benchmarks are likely to behave pro-cyclically — selling when everyone else is selling.

That tendency would have been exacerbated by the continuing increase in the levels of automated and high-frequency trading in markets and the growth in trading of derivatives and exchange-traded funds, all of which can tend to amplify the direction of movements in markets.

“These structural shifts in markets may have also contributed to higher asset price correlations. With lower liquidity, less market-making and more benchmarking, asset prices are more likely to be driven by common shocks, particularly at higher frequencies, than their respective idiosyncratic fundamentals,” the IMF said.

It is the increase in the correlations across asset classes and markets since the crisis that represent a major threat to future financial stability.

The other, more fundamental layer that could add to the brittleness of markets is the fact that the availability of cheap funding from the US, Japan and Europe has not only spawned a raft of so-called carry trades or cross-border arbitrages, but seen borrowing, particularly from developing economies, to fund domestic economic activity and investment.

The rise in the US dollar means that the debt-servicing and repayment burden of that funding, some which has financed asset bubbles, is rising even as asset values are either falling or looking stretched.

The global hunger and hunt for yield in an ultra-low interest rate environment has also pumped up global sharemarket values to levels of questionable sustainability, with real vulnerability to any significant stress.

As the IMF says, the global growth outlook is looking a little better, with the Japanese and European versions of unconventional monetary policies (and the impacts on their currencies) helping. The US policies are diverging, and the dollar strengthening, in a reflection of the stronger state of the US economy.

The IMF says, however, that around the baseline of the modest improvement in the macroeconomic settings, the financial stability risks are rising and rotating.

“Continued financial risk-taking and structural changes in credit markets are shifting the locus of financial stability risks from advanced economies to emerging markets, from banks to shadow banks and from solvency to market liquidity risks,” the IMF said.

If there is to be another major market shock, the Fed isn’t the only possible source. It is, perhaps, the most obvious one.

[greengiraffe]

http://www.businessinsider.com.au/alan-g...ce-2014-12

Replay of Alan Greenspan's "Irrational Exuberance"...

On this day in 1996, then-Federal Reserve chairman Alan Greenspan made his famous speech wherein he asked if “irrational exuberance” had begun to play a role in the increase of certain asset prices.

Here’s the key quote from Greenspan:

Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability. Indeed, the sharp stock market break of 1987 had few negative consequences for the economy. But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy. Thus, evaluating shifts in balance sheets generally, and in asset prices particularly, must be an integral part of the development of monetary policy.

Now, it took more than three years for the Nasdaq to top out from the time Greenspan made the speech.

But the phrase was made famous — or infamous, depending on how you look at it — by Yale professor Robert Shiller, who published the book “Irrational Exuberance” in 2000, predicting the collapse of the dot-com bubble.

Greenspan’s speech has been much-derided as a document outlining how little many critics of the Federal Reserve believe the central bank was aware of the problems that could have been, and were, created by a significant correction in financial markets.

http://finance.yahoo.com/news/feds-yelle...14995.html

Fed's Yellen says equity valuations high, warns of 'potential dangers'
Reuters
26 minutes ago
Related Stories

WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen on Wednesday pointed to high valuations in the stock market and said the central bank needs to keep close tabs on the non-bank lending sector.

Yellen was answering questions from International Monetary Fund Managing Director Christine Lagarde at a "Finance and Society" conference here.

"I would highlight that equity market valuations at this point generally are quite high," Yellen said. "There are potential dangers there."

In a question from Lagarde about financial stability concerns, Yellen said that she sees risks as moderated and does not see any bubbles forming, though the central bank is watching the issue closely.

Yellen also pointed to open-ended mutual funds, and the potential liquidity risks the funds could face amid a wave of redemptions.

(Reporting by Michael Flaherty and Anna Yukhananov; Editing by Meredith Mazzilli)

[greengiraffe]

Mac Bankers ranks amongst the worldest shrewest financial engineers. It pays to listen to them...

Macquarie won’t chase ‘pricey’ assets: Nicholas Moore
THE AUSTRALIAN MAY 09, 2015 12:00AM

Michael Bennet

Reporter
Sydney


Macquarie shares jump on profit results
Nicholas Moore says Macquarie is ‘always conservative and well funded so we can buy across the cycle’. Picture: Ray Strange Source: News Corp Australia < PrevNext >
••
Macquarie Group chief executive Nicholas Moore has played down the likelihood of doing further major acquisitions as asset prices rocket higher, after the bank rode a cocktail of conducive conditions to its second best profit ever.

Handing down a better-than-expected $1.6 billion annual profit, Mr Moore said while the recent purchase of a $US4bn aircraft leasing portfolio “stacked up”, the group remained cautious about using its lofty share price and strong balance sheet to do deals.

While a perennial tyre-kicker, the leasing deal spurred bets that Macquarie would battle hot competition from other savvy buyers for more accretive assets.

“We’re always conservative and well funded so we can buy across the cycle, but in terms of our willingness to buy it will depend on the price,” Mr Moore told The Weekend Australian.

“And the prices for assets now are obviously higher than they have been historically, which would normally say you’d be less likely to buy. It really does come down to deal-by-deal evaluation.”

For the year to March 31, Macquarie’s profit surged 27 per cent, easily beating its own guidance and the market’s expectations in its best year since 2008, when ­former chief Allan Moss signed off before the financial crisis.

Earnings were powered by a large drop in Macquarie’s tax rate to 35.9 per cent, the lower dollar and record results from its three “annuity-style” businesses, such as asset management and corporate and asset finance.

The company’s investment bank, Macquarie Capital, also kicked back into gear as corporate dealmaking fires up, increasing revenue by 29 per cent to $1bn, which Mr Moore labelled as a “very good result”.

But the notoriously cautious Macquarie — which in recent years has shifted its major income sources to asset management and traditional banking — indicated that full-year 2016 profits would only be “slightly up” on $1.6bn, disappointing some bullish analysts. Still, Credit Suisse labelled the profit “very strong”.

After an initial sell-off, Macquarie shares jumped 3.5 per cent to $79.18.

“Macquarie should continue to benefit from a falling dollar and buoyant global merger and acquisition conditions given 70 per cent of income is from offshore,” said Nikko Asset Management head of equities Brad Potter.

“(However) the uncertain outlook in future market conditions together with the opaque nature of many of their business units makes it difficult to forecast.”

Macquarie’s 13 key management executives shared in the spoils, with combined statutory pay jumping 19 per cent to $90.8 million. Mr Moore, who said he remained energised after seven years as CEO, received a 26 per cent jump in pay to $16.5m, making him the highest-paid bank boss in Australia.

Macquarie refrained from topping up the group’s staff bonus pool despite stronger profits, with the compensation ratio falling to 44.7 per cent, from 45.9 per cent.

The group’s return on equity continued its trend higher in recent years, rising to 14 per cent, from 11.1 per cent. The final dividend of $2 per share, partly franked, increased the full-year payout to $3.30, up from $2.60 last year.

The $484bn asset management arm remains the engine for Macquarie, with revenue up 27 per cent to $2.4bn and a more than doubling of performance fees to a record $667m.

Shemara Wikramanayake, the boss of asset management, said base fees were supported as investors moved into more lucrative — and higher-risk — asset classes. But she conceded that future fee gains would be affected by asset price moves.

Markets are worried that the rampant search for yield amid record low rates is seeing risk being mispriced, potentially resulting in a painful return to normality.

Mr Moore said changes in global rates, along with commodity prices and sovereign defaults, were closely monitored to “insulate ourselves from any adverse swings of movements in market conditions”.

“Plainly, we are in a period of very low interest rates, certainly different from the interest rates we all grew up with, so there is always a natural expectation of mean reversion and the consequences of that obviously will be volatility in the financial markets,” he said.

Mr Moore said M&A activity — the biggest earner for Macquarie Capital — was far from peaking as “animal spirits” took time to ignite. Credit Suisse said the M&A cycle was only “halfway through”, as more companies use strong balance sheets and cheap debt for M&A to offset sluggish growth.

Mr Moore said: “In terms of the animal spirits out there today it doesn’t feel particularly frothy, and it’s taken a while for many corporates to move beyond — and many people haven’t — in terms of moving into the M&A cycle. So I don’t feel we’re at the end of the cycle.”

[greengiraffe]

http://www.afr.com/opinion/columnists/lo...504-1na8ei

Loose monetary policy is financial engineering, not real growth
Share via Email
Global economics: Trying to grow through bubbles of wealth is creating the next round of crises. We need structural change instead.

NaN of
Despite the failure of Abenomics the world is still using monetary solutions to their economic problems.
Despite the failure of Abenomics the world is still using monetary solutions to their economic problems. Reuters
by Stephen S. Roach
The world economy is in the grips of a dangerous delusion. As the great boom that began in the 1990s gave way to an even greater bust, policymakers resorted to the timeworn tricks of financial engineering in an effort to recapture the magic. In doing so, they turned an unbalanced global economy into the Petri dish of the greatest experiment in the modern history of economic policy. They were convinced that it was a controlled experiment. Nothing could be further from the truth.

The rise and fall of post-World War II Japan heralded what was to come. The growth miracle of an ascendant Japanese economy was premised on an unsustainable suppression of the yen. When Europe and the United States challenged this mercantilist approach with the 1985 Plaza Accord, the Bank of Japan countered with aggressive monetary easing that fuelled massive asset and credit bubbles.

The rest is history. The bubbles burst, quickly bringing down Japan's unbalanced economy. With productivity having deteriorated considerably – a symptom that had been obscured by the bubbles – Japan was unable to engineer a meaningful recovery. In fact, it still struggles with imbalances today, owing to its inability or unwillingness to embrace badly needed structural reforms – the so-called "third arrow" of Prime Minister Shinzo Abe's economic recovery strategy, known as "Abenomics".

Despite the abject failure of Japan's approach, the rest of the world remains committed to using monetary policy to cure structural ailments. The die was cast in the form of a seminal 2002 paper by US Federal Reserve staff economists, which became the blueprint for America's macroeconomic stabilisation policy under Fed chairmen Alan Greenspan and Ben Bernanke.

The paper's central premise was that Japan's monetary and fiscal authorities had erred mainly by acting too timidly. Bubbles and structural imbalances were not seen as the problem. Instead, the paper's authors argued that Japan's "lost decades" of anemic growth and deflation could have been avoided had policymakers shifted to stimulus more quickly and with far greater force.

BIG BAZOOKA

If only it were that simple. In fact, the focus on speed and force – the essence of what US economic policymakers now call the "big bazooka" – has prompted an insidious mutation of the Japanese disease. The liquidity injections of quantitative easing (QE) have shifted monetary-policy transmission channels away from interest rates to asset and currency markets. That is considered necessary, of course, because central banks have already pushed benchmark policy rates to the once-dreaded "zero bound".

But fear not, claim advocates of unconventional monetary policy. What central banks cannot achieve with traditional tools can now be accomplished through the circuitous channels of wealth effects in asset markets or with the competitive edge gained from currency depreciation.

This is where delusion arises. Not only have wealth and currency effects failed to spur meaningful recovery in post-crisis economies; they have also spawned new destabilising imbalances that threaten to keep the global economy trapped in a continuous series of crises.

Consider the United States – the poster child of the new prescription for recovery. Although the Fed expanded its balance sheet from less than $US1 trillion ($1.27 trillion) in late 2008 to $US4.5 trillion by the fall of 2014, nominal gross domestic product (GDP) increased by only $US2.7 trillion. The remaining $US900 billion spilled over into financial markets, helping to spur a trebling of the US equity market. Meanwhile, the real economy eked out a decidedly subpar recovery, with real GDP growth holding to a 2.3 per cent trajectory – fully two percentage points below the 4.3 per cent norm of past cycles.

The American consumer – who suffered the most during the wrenching balance-sheet recession of 2008-2009 – has not recovered. The wealth effects of monetary easing worked largely for the wealthy. For the beleaguered middle class, the benefits were negligible.

"It might have been worse," is the common retort of the counter-factualists. But is that really true? After all, as Joseph Schumpeter famously observed, market-based systems have long had an uncanny knack for self-healing.

Beyond the impact that this approach is having on individual economies in Japan and Europe are broader systemic risks that arise from surging equities and weaker currencies. As the baton of excessive liquidity injections is passed from one central bank to another, the dangers of global asset bubbles and competitive currency devaluations intensify. In the meantime, politicians are lulled into a false sense of complacency that undermines their incentive to confront the structural challenges they face.

Policy debates in the US and elsewhere have been turned inside out since the crisis – with potentially devastating consequences. Relying on financial engineering, while avoiding the heavy lifting of structural change, is not a recipe for healthy recovery. On the contrary, it promises more asset bubbles, financial crises, and Japanese-style secular stagnation.

Stephen S. Roach, a faculty member at Yale University and former chairman of Morgan Stanley Asia, is the author of a new book Unbalanced: The Codependency of America and China.

Project Syndicate

AFR Contributor

[greengiraffe]

Getting out, not in is the real problem
873 words
9 May 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.

Part of the grief felt across global financial markets this week stems from the unusual calm conditions of the past few years.
A real feature of 2014 was the low level of volatility in global financial markets with some measures in bonds, shares and currency trading falling to their lowest level over the past 25 years.
This could have emboldened some investors and even increased the levels of risk taking as investors went searching for any sort of yield at any price, convinced that interest rates would stay low along with outlook for returns.
When these positions are unwound, it can lead to a spike in volatility.
And, normally what happens when financial markets get nervous, smart, or bold, investors, are told to take advantage of the sell-off.
Along the line of it's best to buy when everyone else is selling.
But when volatility really sets in, it quickly becomes a case of all bets are off.
The sell-off in bonds and shares this week also highlights what happens when everyone is positioned the same way and wants to exit at the same time. It also shows how investors can feed on each other in a dangerous manner as they get nervous about a certain position.
Add in the daily news cycle that creates all the headlines not to mention the computer trading that generates a lot of the trading and investors are dealing with a different set of rules on dealing desks. As a bond fund manager said this week, it always seems easier to get into a trade but very difficult to exit one.
For any retail investor who has taken the plunge into corporate bonds in the wake of the financial crisis, that's important to note.
Buying corporate bonds when an issue comes to market is the easy part. You bid, you get allocated the bonds and then you sit back and collect the coupons or interest payments.
Trying to get out of them it will depend on market conditions. If it's a quiet day and there's been no big change in sentiment, it might not be too hard.
Usually something has happened to prompt the change of heart that turns a happy holder into a nervous seller. And, then it can be difficult to trade out of them.
One of the real problems in global financial markets over the past few years has been that investors have grown used to record low interest rates and central banks buying bonds like there is no tomorrow.
That has kept yields at levels never seen before.
But there have been warnings about a potential sell-off. In April, the governor of the Reserve Bank of Australia, Glenn Stevens, said in a speech from New York that world conditions could spark an "abrupt" sell-off, while JPMorgan Chase CEO Jamie Dimon has also warned that some of the larger moves in currency and bond markets over the past year or so are a "warning shot across the bow".
The former Pimco chief executive Mohamed El-Erian said at a hedge fund conference in Las Vegas that the sell-off witnessed in bond markets this week pointed to a serious problem for financial markets. It could spell trouble when investors want to move out of big positions. He went on to say that "we have this illusion of liquidity for when the paradigm changes. It's not just an illusion, it's a delusion".
Ask any price maker about a lack of liquidity in financial markets and they will probably point to all the regulation and compliance brought in since the global financial crisis as a reason why liquidity can all of a sudden dry up.
Investment banks don't hold as many bonds on their balance sheets these days so secondary trading is a lot more difficult.
This week, it was the German 10-year bond yield that had fallen to a low of 0.07 per cent, as good as zero, that caused the selling in bonds that wiped almost half a trillion of value from all global bonds.
On Friday, there was some recovery and yields started to drop back down.
That investors got nervous about lending to the German government for 10 years for almost no return is hardly surprising, that they are happy to lend at around 0.59 per cent by the end of the week is.
Bond yields are still very low by historical standards and the sell-off this week was also helped by the rise in the oil price.
Deflation, particularly in Europe, seems to have subsided for the time being and it gave the sellers another reason to sell. In addition, Greece and its rescue package was simmering in the background, another selling point.
All these together triggered the sell-off while here in Australia it was the RBA's meeting on Tuesday that investors interpreted as being the end of the rate cutting cycle. By Friday, that was perhaps not the case.
Investors should get ready for these sorts of sell-offs. As the Federal Reserve looks to raise rates, there will be more of them.

Fairfax Media Management Pty Limited

Document AFNR000020150508eb590001h

[specuvestor]

US$900b to treble the US$10t equity market? Really? I would think the equation $2.7t boosting GDP is misconstrued.

"Uncanny knack for self-healing" like in 1929? Most post WW2 crisis are solved by human intervention rather than letting irrational Mr. market adjust itself. It is not perfect but i would rather that than let a well- known psychopath handle the mess, glorified only by misguided theorists that it will eventually turn out well much like Hitler or imperial Japan's dictum.

[greengiraffe]

'Liquidity paradox' hits

Mark Mulligan
473 words
14 May 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.

Extreme easing by central banks has led to crowded trades in a range of financial assets, causing large-scale mismatches in the number of buyers and sellers, Citi says.

The US investment bank warns that this "liquidity paradox" - so called because the more liquidity central banks add, the higher the risk of a serious liquidity crunch - started out in corporate bond markets but is now distorting government bond, currency and share markets.

It says while the post-financial crisis crackdown on own-account trading by investment houses was partly to blame for a decline in professional market-making, the increased difficulty of finding buyers because everyone is selling at once owes more to central banks' hold on markets since the crisis.

With governments too indebted to stimulate broken economies, central banks in the last eight years have stepped up to encourage spending and investment through near-zero per cent interest rates.

Quantitative easing, where they buy government bonds to anchor long-term interest rates and push liquidity into other assets, has been used in the US, UK, Japan and European Union to help kick-start moribund economies. However, this form of monetary policy has encouraged a herd mentality among pension funds, insurance companies, trading houses and other professional investors, Citi says.

"We argue that in addition to regulations, central banks' distortion of markets has reduced the heterogeneity of the investor base, forcing them to be 'the same way round' over the past four years to a greater extent than ever previously," the banks says.

"This creates markets which trend strongly, but are then prone to sudden corrections.

"It also leaves investors more focused on central banks than ever before - and is liable to make it impossible for the central banks to make a smooth exit."

The warning is just the latest in a series by economists, central bank officials and other investment specialists in recent years. They say record-low bond yields are making price trading in fixed-income assets attractive, but also driving equity valuations beyond where they relate to fundamentals. Investors are also crowding into high-risk corporate bonds in the yield hunt.

Relentless betting on central bank rate movements around the world - particularly on those of the US Federal Reserve - is also feeding volatility in currency markets.

Markets last week were particularly tumultuous as investors dumped government bonds after deciding disinflation pressures in Europe had eased. There was another sell-off on Tuesday this week as investors became nervous ahead of heavy new issuance.

AllianceBernstein senior portfolio manager for fixed income investments Jeremy Cunningham in March warned that cuts in market-making by investment banks, coupled with underpriced risk in some credit classes, would lead to liquidity crunches as the US began lifting interest rates for the first time in almost a decade.


Fairfax Media Management Pty Limited

Document AFNR000020150513eb5e0002n

[CityFarmer]

The consensus I got from market player's opinions/views, is rate will increase around Sept 2015...

Fed’s Mester says ‘time is near’ for US interest-rate increase

(May 26): Accelerating inflation and strong employment growth are pushing the US economy close to the point where it can support higher interest rates, Federal Reserve Bank of Cleveland President Loretta Mester said.

“If the data comes in according to my forecasts then the time is near where we’re going to be wanting to raise rates,” Mester said on Monday in an interview in Reykjavik, Iceland.
...
http://www.theedgemarkets.com/sg/article...e-increase