Tag Archives: Federal Reserve

The Fed's interventions in the repo market are attracting considerable comment. A lot of people seem to think the Fed has embarked on another QE program without Congressional approval. And the usual suspects are complaining that the Fed is pumping up stock prices and debasing the dollar.  Stocks are indeed heading for the moon - though so is the dollar, which rather undermines those who think it is being debauched. But the Fed's interventions in the repo markets have nothing to do with stock...

Ever since the secured overnight repo rate (SOFR) spiked to 10% in September, there have been dire warnings that these exceptional movements show the financial system is fundamentally broken. The story goes that the post-crisis financial system is so dysfunctional that it is unable to operate without continual injections of money from central banks. The Fed's attempt to reduce the $4.2tn of reserves it added to the financial system in three rounds of QE has dangerously destabilised the...

Ever since the secured overnight repo rate (SOFR) spiked to 10% in September, there have been dire warnings that these exceptional movements show the financial system is fundamentally broken. The story goes that the post-crisis financial system is so dysfunctional that it is unable to operate without continual injections of money from central banks. The Fed's attempt to reduce the $4.2tn of reserves it added to the financial system in three rounds of QE has dangerously destabilised the...

The following is an interview with Yena Yoon – a financial journalist with Chosen Ilbo “the largest newspaper in South Korea” conducted on 12 February, 2018, but still relevant. What is the most remarkable change in financial market after 2008 global crisis do you see? Why do you think so? The most striking outcome from the global financial crisis of 2007-9 was that there was no structural change to the international financial architecture/system – the system that was at the heart of the...

On Wednesday, 19th September and again on 22nd September, the BBC broadcast an interview in which I participated. It was called Cassandras of the Crash. The programme is available on the BBC’s Radio 4 website, with the following introduction. “Ten years ago, in autumn 2008, the world watched as the biggest financial meltdown in history unfolded. The crash plunged the world into recession, lost millions of families their homes and its shadow still hangs over our politics today. And when the...

This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since March 2018. As usual, we wish to remind our readers that the DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process. For more information about the model and variables discussed here, see our DSGE...

The Financial Times asked economists the following: How far will the Bank of England raise interest rates next year? Do you think they should? PRIME economists responded in this way: We think much will depend on the Federal Reserve and the ECB. The BoE will follow both, but will have time to assess the impact of global tightening. We do not think that rate rises would be wise at a time of weak demand, low productivity and heavy corporate and consumer indebtedness. Thanks to austerity,...

To all who argued the financial world would’ve collapsed without the bailouts: The political world is collapsing now because of the bailouts — Emanuel Derman (@EmanuelDerman) June 25, 2016 The bigger picture of the early 21st century follows: Western nations experienced a massive blowout bubble of leverage, irrational exuberance, and Hayekian pseudo-money creation. Yet this money was not going to overwhelmingly productive causes. The real output of the Western world did not follow...

The last time I saw universal basic income discussed on television, it was laughed away by a Conservative MP as an absurd idea. The government giving away wads of cash responsibility-free to the entire population sounds entirely fantastical in this austerity-bound age, where “we just don’t have the money” is repeated endlessly as a mantra. Money, they say, does not grow on trees. (Only as figures on the screen of a computer). In this world, universal basic income seems like a rather distant...

Bill appeared on CCTV America discussing the American economy with Rachelle Akuffo. You can view it here. [Translate]