Tag Archives: FED

… as Neil Schirmer in The Alchemists (especially Chap. 11) documented, the crucial move that halted the collapse of the euro and the threat of a fullout global collapse was a set of swaps the Fed pulled off that led to it taking about $600 billion of Eurojunk from the distressed European banks through the ECB onto the Fed balance sheet. These troubled assets were gradually and very quietly rolled off the Fed balance sheet over the next six months to be replaced by mortgage backed...

1. Rising interest rates will put pressure on marginal players, domestic and foreign. 2. The geopolitical situation is volatile and a surprise (shock) could happen at any time. 3. In acting in its own self-interest without taking allies' interests into account, the US under the Trump administrations is straining alliances, especially with Europe, and also aggravating trading partners.Credit Writedowns Geopolitical (And Market) Risks Because Of US Policy And The Fed Powell To...

Federal Reserve always wants millions of people to be out of work… Put more bluntly, it’s worth at least thinking about what Bernie Sanders would do to mitigate the impact of Jerome Powell. Buffer stock of employed versus buffer stock of unemployed.MarketWatchOpinion: Proposals to guarantee jobs spotlight uncomfortable truth about Fed Steve Goldstein | DC Bureau ChiefSee alsoWhy the Fed should give everyone a checking account Greg Robb | Senior Economics ReporterSee also But the threat...

Interesting look at the history.Information Transfer EconomicsIt's the 80s!Jason Smith

Policymakers have helped to perpetuate an economic model that is ultimately unsustainable. The article is based on Bill Mitchell's analysis of US unemployment.AlterNetThe Fed Is on the Verge of Making a Major Policy ErrorMarshall Auerback / AlterNet

My reading of the consensus view is that the change in personnel at the Federal Reserve has coincided with a more hawkish outlook, although the tax cut presumably helped push matters. I do not have a strong reason to disagree with such a view; the Fed is probably going to revert back to its historical policy of gradualism -- which was a 25 basis point hike per meeting.... Bond Economics Back To GradualismBrian Romanchuk

Ed Harrison on Ray Dalio on bonds.Credit Writedowns Ray Dalio: We are already in a bond bear market right nowEdward Harrison

As the Federal Reserve meets today to decide how to communicate its messaging on future rate hikes and balance sheet reduction, financial stability will play a key role. Yesterday, I wrote about the Bank of International Settlements new warnings on financial stability. And just this morning, I read a piece from Goldman Sachs Asset Management EMEA division head Andrew Wilson, warning that the risk of overheating was real. So let’s put some framing around this issue and ask how the Fed reacts...

Forecast.Credit Writedowns As the Fed meets, expect expansion through 2018, but problems thereafterEdward Harrison

The big picture then is this: a global economy into its ninth year of the business cycle that is starting to gain momentum with the US flirting with 3% growth and 4% unemployment with richly priced asset markets but a flattening yield curve. We’ve seen this picture before.… In retrospect, one could argue that the Fed’s late interest rate hike campaign was a policy error – that the Fed should have seen the flattening yield curve as a canary in the coal mine and resisted raising its policy...