Category Archives: The Fed / Monetary Policy
The Fed caved to what markets wanted (needed?). Chairman Powell did an admirable job in his press conference of calmly conveying a message that everything is somewhat awesome, but the global economy is slowing, and the Federal government shutdown is having a dampening effect (neither of those things are the fault of Fed policy). So, we’re now fully migrated to expectations for no rate […] Read the rest of this entry
Today and tomorrow the Fed has an FOMC meeting. Tomorrow afternoon has the statement and presser. BTW now every FOMC meeting has a press conference -instead of every second meeting. So every meeting gives the Fed a chance to calm/steer markets. Fed Chair Powell will announce one of these three things tomorrow: Maintain the “everything is great” position and threaten 2 rate hikes this year. […] Read the rest of this entry
If you have not seen Richard Koo’s video about how banks and regulators acted in a previous existential crisis, you should. It is very instructive. Here it is. Based on my observations over the past decade and Koo’s comments, here is my playbook for fiscal & monetary policy. I call it How to run an economy. Banks: Bankers should act responsibly. They should […] Read the rest of this entry
I read David Rosenberg’s “Breakfast with Dave” every day and have a great deal of respect for him. He’ll have forgotten more about economics than I’ll ever know (he is an economist whereas I am an engineer). However there’s a message I took away from this morning’s note that is troubling. Not surprising. But troubling. Dave pointed out that in 1998 the SPX was […] Read the rest of this entry
The Fed’s FOMC statement showed no immediate threat of Fed tightening, per my expectations. Here are the interesting bits…. There’s no way the Fed will be able to begin tightening this year and probably not next year either. Party on…. But for how long?
I am one of John Mauldin’s million-plus newsletter readers. The letter from two days ago is an interesting read. I recommend it. Before you do, here are a few more pictures to add to your enjoyment… These from the newsletter a couple months ago…. (thanks Bruce!) Here’s a link to John Mauldin’s newsletter: http://www.mauldineconomics.com . Disclosure: I have no relationship […] Read the rest of this entry
Apparently the White House is going to appoint Janet Yellen to be the new Fed Chairperson tomorrow. Given that she’s been as dove-ish as Dr. Bernanke, this should provide some short-term support to the risk-on view. Let’s see how the future markets begin reacting tonight….
Go see Money for Nothing- the movie. This documentary explains the Federal Reserve’s actions and results over the past several decades. It explains why the U.S. economy is fragile and at high risk of seeing another deep recession (and stock market collapse). Here’s the link to the website for the movie: moneyfornothing . After you watch the movie, if you find yourself wanting […] Read the rest of this entry
Don’t look now, but Ben Bernanke is warning about excessive risk taking in financial markets, and the use of leverage. Ben is apparently watching for signs of bubbles in asset markets. “In light of the current low interest rate environment, we are watching particularly closely for instances of ‘reaching for yield’ and other forms of excessive risk-taking, which may affect asset prices and their […] Read the rest of this entry
Here in the US: The Fed: Ben Bernanke gave an update on the US economy on Thursday. It was time for the “Beige Book” report — a report summarizing the economy in all 12 Fed regions that happens 8 times a year. The latest news suggests the economy was doing slightly better in early April to mid May than in the first quarter. […] Read the rest of this entry