Snow day: Bernanke releases comments on exit strategy
Today, Chairman Bernanke was scheduled to testify before the House Financial Services Committee on the Federal Reserve's strategy for exiting all the new extraordinary lending and monetary policies....
View ArticleCharles Plosser's Keynote Speech at the SOMC Symposium
Click here for a printer-friendly version of Professor Plosser's remarks.EXITShadow Open Market CommitteeMarch 25, 2011New York, New YorkCharles I. PlosserPresident and Chief Executive OfficerFederal...
View ArticleThe Fed's Forward Guidance and Forecasting Inconsistencies
The Fed’s effort to manage market expectations and aggregate demand through forward guidance may generate as many inconsistencies and misinterpretations as benefits, particularly as the Fed constantly...
View ArticleFed Holds 92% of Bank Cash, Pushes Bank Reserves to 25% of Deposits
We think U.S. and global growth prospects are deteriorating under the weight of bad monetary policy, making equities vulnerable until policies improve. Today’s PPI declined 0.2% month-over-month for...
View ArticleWhy It Matters Whether the Fed Targets Inflation or Unemployment
Today, more than four full years since analysts at the National Bureau of Economic Research declared the last recession officially over, unemployment, at 7.3 percent, remains elevated. The jobless rate...
View ArticleFed Should Cut Interest on Reserves
According to the minutes of their late-October meeting, Federal Open Market Committee members discussed the possibility of lowering the interest rate the Fed pays on reserves held on deposit by...
View ArticleSome Post-Tapering Announcement Observations
In one sense, the Federal Reserve’s tapering announcement last week is no big deal: the Fed will continue its massive quantitative easing (QE), and cutting back asset purchases by $10 billion per month...
View ArticleIf Possible, Fed Forecasts Are Worse Than Its Policies
One might think that the qualification to become a governor of the Federal Reserve Board is to be an eminent economist. But the real qualification is a professional optimist. Here's why.The FOMC...
View ArticleRising Long-Term Interest Rates: What Do They Mean?
Long-term interest rates rose noticeably in the last two months of 2013, with the yield on the 10-year U.S. Treasury note moving back above 3 percent during the year’s final trading sessions. What...
View ArticleFed Normalization Possible; Non-Banks Adding Liquidity
Wednesday’s Wall Street Journal front page has an article on non-bank lending to traditional banking areas. “He figured a bank would put him through weeks of aggravation, then reject him. He turned...
View ArticleFed Briefly Doubles Its Borrowings Through Reverse Repos; Good Step
The Federal Reserve is building the tools it will need to exit from its extraordinary monetary policy. Just as the market was against the Fed tapering, it will worry periodically about rate hikes, but...
View ArticleThe Fed at 6 1/2 Percent Unemployment
The unemployment rate has fallen to 6.7 percent. January’s employment situation, to be released next Friday, may show an unemployment rate of 6 1/2 percent or lower—the Federal Reserve’s stated...
View ArticleYellen Fails to Change Fed’s Tune in First Testimony
Earlier today, Janet Yellen gave her first Congressional testimony as chair of the Federal Reserve Board of Governors. Chair Yellen offered no surprises and implied the Fed will mostly remain on its...
View ArticleReconfiguring the Fed’s Forward Guidance
The Federal Open Market Committee has an explicit, two percent U.S. inflation target. That announcement, made in January 2012, promises that the monetary policy mistakes of the 1970s will never be...
View ArticleAchieving Normalcy in Monetary Policy
Economic performance continues to improve and in most regards has moved close to normal, but the Federal Reserve’s monetary policy remains far from normal. As the Fed tapers its asset purchases, it...
View ArticleThe Fed: Extraordinary Measures in Ordinary Times
Economic performance continues to improve and move toward normal, while the Fed’s monetary policy is far from normal. The economy is in its fifth year of expansion, the unemployment rate has fallen...
View ArticleHow the Fed is Hurting Seniors
Seniors, wake up and call Janet Yellen. With an increase in interest rates next year, as Chair Yellen implied in her press conference on Wednesday, she can restore your savings accounts to relevance....
View Article6 Dubious Yellenisms from the Fed Chair’s Testimony
Federal Reserve Chair Janet Yellen did a masterful job navigating the political shoals of the Joint Economic Committee yesterday. She told liberal Vermont Sen. Bernie Sanders (I-VT) that she shared his...
View ArticleAmerica Is Being Damaged By Low Rates, Weak Dollar
Five years after the beginning of the economic recovery, after rock-bottom interest rates and trillions of dollars of quantitative easing by the Federal Reserve, the economy is growing about 2%.No...
View ArticleMoney Still Matters
It’s strange: For many years, the Federal Reserve has conducted monetary policy with little if any reference to the money supply. Fed officials never mention M1 or M2 anymore, and analysts in academia...
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