How little resolve our central bank has. We said we thought Fed was unlikely to raise rates, or if it did, it would be at most 25 basis points between now and year end., which falls in the category of being cosmetic. The central bank has been particularly, one might say unduly, attentive to the […]
Read more...It’s one thing to read an apocalyptic alarm from, say, a blogger or a newsletter writer. It’s quite another to see it coming from an analyst at a large institution, in this case AIG. Bernard Connolly is deeply critical of central banks, not just of their recent actions but also of their very existence, and […]
Read more...A solid column from Bloomberg’s Caroline Baum on what she sees as the market’s irrational expectations for the Fed. Key points: Investors focused on Bernanke’s remarks about inflation and the dollar, when he also stressed the less than robust growth outlook The last time the central banks said it saw inflationary risks predominating it wound […]
Read more...The Financial Times’ John Authers, who called a market turn in bonds in early June of last year, sees another major shift in sentiment on the outlook for inflation and the dollar: For months, through all the volatility of the credit crisis, one bet has been enough to make profits. It is very simple: bet […]
Read more...As much as I respect and am in agreement with Nouriel Roubini’s views, he often, no doubt unintentionally, comes off as unduly enthusiastic about the prospect of carnage. His last offering goes through the litany of bad news that hit Friday: the rise in unemployment, the rise in oil (stoked in part by fear that […]
Read more...I’ve been quite taken with Thomas Palley’s few but very high quality posts, particularly since they have often made bold, persuasive arguments. Today, however, he does himself a disservice by giving a well written but conventional (among US academic economists) defense of the central bank’s conduct. Note that he deals only with monetary policy (he […]
Read more...An article in today’s Wall Street Journal, “Insider Joins Critics of the Fed, Faulting Credit-Crisis Programs,” discusses at some length a recent speech by Richmond Fed president Jeffrey Lacker in which he took issue with some of the Fed’s recent financial services industry rescue efforts. The article itself failed to do justice to his speech, […]
Read more...A reader forwarded me a Morgan Stanley fixed income research report wrap, which included a discussion of the role of gasoline and oil price subsidies in certain developing countries. The price gives an good overview of the role these defacto consumer price discounts have played, and argues that they will have to be cut back […]
Read more...It appears the US central bank got taken to the woodshed at a conference hosted by the New York Fed for overly aggressive rate cuts, but despite jeering from the peanut gallery, it looks likely that the Fed will hold pat until at least the fall. While I have no idea of how representative his […]
Read more...While some writers in the US have taken note of the fact that the Fed’s rate cuts have propelled the US into negative real interest rate territory, until recently, the role of overly-permissive monetary policy in inflation-fraught countries like China and the Gulf States has gotten comparatively little attention. Last week, the Economist devoted an […]
Read more...It has been truly remarkable how consumer spending has held up, well, appeared to hold up, in the face of strong headwinds. Household debt to equity at record levels. Fewer refis to facilitate dis-saving as an illusion of prosperity. Home equity lines cut back. A deteriorating employment market (not-so-bad employment stats masking a fall in […]
Read more...Funny how it takes a survey to confirm what any reader of the press ought to know right now: consumers, hit by rising fuel and food prices, expect a higher level of inflation for the next 12 months (5.2%, according to a Reuters/University of Michigan survey): One of the things that has led the Fed […]
Read more...The dollar rose today, and gold has fallen below $900 as f this writing due to revisions in the first quarter GDP release that increased growth from “anemic” to “slightly less anemic”. Note that there was considerable skepticism about the initial 0.6% GDP growth figure (the revised level is 0.9%) because the total was entirely […]
Read more...A reader pointed me to a great post at Institutional Risk Analytics, which consists of an interview with Richard Alford, an economist in the Federal Reserve Bank of New York’s foreign department during the heady years of the Plaza Accord and active FX intervention by the Group of Seven who now works as an expert […]
Read more...Yes, sports fans, I am late in reporting on this, but since the focus of the RGE Monitor-sponsored panel discussion was fundamental in nature, the loss of a few days in a slow news period has not lead to any sightings that would contradict either the tone or the specifics of the discussion. The panel […]
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