We have just heard from new Federal Reserve Chairperson Janet Yellen in her first official speech entitled, What the Federal Reserve is Doing to Promo...
I believe that the Fed has overreached in its monetary policy not just in response to the latest crisis, but pretty consistently over the 15-20 years. In an effort to lessen the effects of (inevitable) economic downturns, the Fed (and other central banks) has caused extreme financial distortions and dislocations.
Once upon a time in a century far, far away, the U.S. economy was perceived by one and all as in a "Goldilocks" state: not too cold, not too hot, just right."
Three aspects in particular strike me as liable to become important in the coming years. First, while much of Bernanke's personal interest and expertise was on financial markets and monetary policy, Yellen's own focus has always been more on understanding labor markets frictions and outcomes.
Even more worrisome than the wild swings on Wall Street and many other stock markets has been the impact of tapering on major emerging markets.
Now, we get Hank: Five Years from the Brink, in which former U.S. Treasury Secretary Henry "Hank" Paulson gives us a play-by-play of how he, Fed Chairman Ben Bernanke and Federal Reserve chairman Timothy Geithner, kept everything from collapsing while alternately massaging and challenging the various egos that ran the nation's largest banks.
Fifty years after President Lyndon Johnson declared a War on Poverty, the United States is still not a fair playing field for millions of children afflicted by preventable poverty, hunger, homelessness, sickness, poor education and violence in the world's richest economy with a gross domestic product (GDP) of $15.7 trillion. Every fifth child (16.1 million) is poor, and every tenth child (7.1 million) is extremely poor. Children are the poorest age group and the younger they are the poorer they are. Every fourth infant, toddler and preschool child (5 million) is poor; 1 in 8 is extremely poor. A majority of our one- and two-year-olds are already children of color. In five years children of color who are disproportionately poor, nearly 1 in 3, will be a majority of all children in America and of our future workforce, military and consumers. But millions of them are unready for school, poorly educated and unprepared to face the future.
For all the Yellen-watching going on, it is important to remember that the changeover is likely to be pretty subtle, especially at first.
Now that the Fed has begun to reduce its QE3 securities' purchases $10B per month in January, what will that do for growth? My answer is it's too soo...
Ben Bernanke is now defending his record as Fed Chairman. He shouldn't have to, as without the Fed's easy money policies--such as QE3--the economy wo...
In the end we didn't see a massive sell-off. Stocks didn't tank and Treasury yields didn't soar (but perhaps anticipated it over the last week). What was the dramatic shift?
I keep running into people who want to talk about this idea that faster inflation would help the economy pull out of its growth slog.
Between deficit spending and dollars created on the Fed's balance sheet, we estimate $8 trillion has been infused into the U.S. economy over the past ...
We definitely need an exit plan from quantitative easing before we become too addicted to it and it leads to a new round of economic instability.
Not tapering would have delivered an effective slap on the wrist to the market, the combination of the SEP and the forward interest rate guidance together meant 'they did protest too much'.
How are the trials and tribulations of the rupee, the Brazilian real, the Turkish lira, the South African rand and the Indonesian rupiah connected?