Monetary Policy
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“Fed Off’ls at Jackson Hole Discuss Tough Policy Challenges”
“Federal Reserve policymakers and many of the world’s other top central bankers are gathering Thursday for their annual retreat and symposium in the shadow of the Grand Tetons. They are also meeting in the shadow of looming economic and financial problems, which seem to be defying the stimulative efforts of both monetary and fiscal policy.…
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Is There a Government Bond Bubble?
“YES, there is a government bond bubble. And it’s huge. Uncle Sam and his counterparts in the EU and Japan are broke and are, almost surely, going to print vast quantities of money to cover their enormous spending obligations. The printing presses are already working full time. The Fed, for example, has increased the monetary…
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Why QE Could Trigger a Collapse of the Dollar
“A week ago, the Federal Reserve initiated a new program of “quantitative easing” (QE), with the Fed purchasing U.S. Treasury securities and paying for those securities by creating billions of dollars in new monetary base. Treasury bond prices surged on the action. With the U.S. economy predictably weakening, this second round of quantitative easing appears…
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“Treasure 10-Year Yields Near 17 Month Low”
“The Fed’s purchases today will be its second this week, after it bought $2.551 billion of notes on Aug. 17. The central bank plans to purchase about $18 billion of U.S. debt by the middle of September using the money from principal payments on its holdings of agency debt and agency mortgage-backed securities, according to…
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“Fed May Reemerge as Bigger Buyer With Resumption of Treasury Purchases”
“The Federal Reserve will likely reemerge as the biggest buyer of Treasuries when it resumes purchasing U.S. government securities today to prevent money from draining out of the financial system. JPMorgan Chase & Co. strategists estimate the Fed will buy about $284 billion in Treasuries over the next year, or more than the combined purchases…
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The Fed Can’t Solve Our Economic Woes
A policy of low interest rates is a textbook response of monetary authorities to the economic weakness brought on by deficient aggregate demand. The policy is justified by pointing to various ways in which money can promote economic activity—including by stimulating investment, discouraging savings, encouraging consumption spending, and allowing individuals to lower their debt burdens…
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“Treasury Fixing Mortgage-Finance System Juggles Limitless Bailout, Economy”
“The U.S. Treasury Department, hosting a summit tomorrow on how to repair the mortgage-finance system, may get a blunt message from stakeholders in an industry tied to 15 percent of the country’s economy: Don’t screw it up. The system’s size and complexity mean that a wrong move by the Obama administration could restrict credit, drive…
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“In a Sluggish Economic Summer, No Easy Fix Ahead”
“Typically, the Fed can lower interest rates to encourage Americans to borrow money and spend it, invigorating the economy. But the benchmark interest rate controlled by the Fed has been almost zero for more than a year now. The Fed this week took a new step by announcing it would use the proceeds from its…
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“Fed Official Warns of Starting a Cycle of Boom and Bust”
“In a sharply worded dissent to the Federal Reserve’s decision to help ease the supply of credit to the economy, a member of the Fed committee that sets interest rates said Friday that the central bank’s monetary strategy could backfire and touch off a new boom-and-bust cycle. The member, Thomas M. Hoenig, the president of…
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Idle Resources Don’t Eliminate Inflation
One of the gravest sins of modern economics is its tendency to treat resources, both capital and labor, as essentially homogenous aggregates. Capital is more or less interchangeable with other capital, and labor is treated much the same. One reason for this is that such homogeneity and aggregation make mathematical modeling much more tractable, as…
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“Fed Off’ls at Jackson Hole Discuss Tough Policy Challenges”
“Federal Reserve policymakers and many of the world’s other top central bankers are gathering Thursday for their annual retreat and symposium in the shadow of the Grand Tetons. They are also meeting in the shadow of looming economic and financial problems, which seem to be defying the stimulative efforts of both monetary and fiscal policy.…
-
Is There a Government Bond Bubble?
“YES, there is a government bond bubble. And it’s huge. Uncle Sam and his counterparts in the EU and Japan are broke and are, almost surely, going to print vast quantities of money to cover their enormous spending obligations. The printing presses are already working full time. The Fed, for example, has increased the monetary…
-
Why QE Could Trigger a Collapse of the Dollar
“A week ago, the Federal Reserve initiated a new program of “quantitative easing” (QE), with the Fed purchasing U.S. Treasury securities and paying for those securities by creating billions of dollars in new monetary base. Treasury bond prices surged on the action. With the U.S. economy predictably weakening, this second round of quantitative easing appears…
-
“Treasure 10-Year Yields Near 17 Month Low”
“The Fed’s purchases today will be its second this week, after it bought $2.551 billion of notes on Aug. 17. The central bank plans to purchase about $18 billion of U.S. debt by the middle of September using the money from principal payments on its holdings of agency debt and agency mortgage-backed securities, according to…
-
“Fed May Reemerge as Bigger Buyer With Resumption of Treasury Purchases”
“The Federal Reserve will likely reemerge as the biggest buyer of Treasuries when it resumes purchasing U.S. government securities today to prevent money from draining out of the financial system. JPMorgan Chase & Co. strategists estimate the Fed will buy about $284 billion in Treasuries over the next year, or more than the combined purchases…
-
The Fed Can’t Solve Our Economic Woes
A policy of low interest rates is a textbook response of monetary authorities to the economic weakness brought on by deficient aggregate demand. The policy is justified by pointing to various ways in which money can promote economic activity—including by stimulating investment, discouraging savings, encouraging consumption spending, and allowing individuals to lower their debt burdens…
-
“Treasury Fixing Mortgage-Finance System Juggles Limitless Bailout, Economy”
“The U.S. Treasury Department, hosting a summit tomorrow on how to repair the mortgage-finance system, may get a blunt message from stakeholders in an industry tied to 15 percent of the country’s economy: Don’t screw it up. The system’s size and complexity mean that a wrong move by the Obama administration could restrict credit, drive…
-
“In a Sluggish Economic Summer, No Easy Fix Ahead”
“Typically, the Fed can lower interest rates to encourage Americans to borrow money and spend it, invigorating the economy. But the benchmark interest rate controlled by the Fed has been almost zero for more than a year now. The Fed this week took a new step by announcing it would use the proceeds from its…
-
“Fed Official Warns of Starting a Cycle of Boom and Bust”
“In a sharply worded dissent to the Federal Reserve’s decision to help ease the supply of credit to the economy, a member of the Fed committee that sets interest rates said Friday that the central bank’s monetary strategy could backfire and touch off a new boom-and-bust cycle. The member, Thomas M. Hoenig, the president of…
-
Idle Resources Don’t Eliminate Inflation
One of the gravest sins of modern economics is its tendency to treat resources, both capital and labor, as essentially homogenous aggregates. Capital is more or less interchangeable with other capital, and labor is treated much the same. One reason for this is that such homogeneity and aggregation make mathematical modeling much more tractable, as…
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