Larry's Blog
U.S. Economic Performance Under Obama and Bush43
January 26, 2012
With the 2012 U.S. presidential campaign heating up, traffic has risen noticeably to an article on this site that was posted in August 2008, which compared growth, inflation, and the performance of share prices, the dollar, and job creation under different presidencies since the Kennedy administration. Some of the figures upon which that original study […] More
New Overnight Developments Abroad - Daily Update
Markets Pumped by Fed Decision and Greek PSI Rumor
January 26, 2012
There is a stronger risk appetite today. The euro touched a 5-week high of $1.3176 and is 0.3% stronger on balance. The dollar has also slipped 0.6% relative to the Australian dollar, 0.5% versus the kiwi, 0.4% against the Swiss franc, 0.3% versus the loonie, 0.2% against the yen and 0.1% vis-a-vis sterling. The German […] More
Central Bank Watch
Reserve Bank of New Zealand: No Change for Seventh Straight Meeting
January 25, 2012
New Zealand’s 2.5% Official Cash Rate (OCR) has been retained. This continues to match the cyclical low maintained from April 2009 until June 2010. The OCR was raised by 25 basis points each in June and July 2010 but cut by 50 bps in March of 2011. A statement from the central bank cites "well-contained […] More
Central Bank Watch
Significant New Information Conveyed at the Bernanke News Conference
January 25, 2012
Before the start of today’s press conference, the FOMC had already managed to convey most of the really useful insights into Fed thinking, but a couple of great tips nonetheless were added by Chairman Bernanke. One should not look at the mean but rather the median of the scatter diagrams of predicted end-year levels of […] More
Deeper Analysis
A Virtual Easing by the FOMC
January 25, 2012
The Federal Open Market Committee didn’t cut Federal funds rate because it’s already been near zero since late 2008. New quantitative easing wasn’t announced because the present round of Operation Twist still has five months to run. The third major policy tool after cutting interest rates and unconventional measures to increase liquidity and depress longer […] More
Central Bank Watch
An FOMC Experiment in Transparency
January 25, 2012
Today is FOMC Day, and it will be like none before it and Federal Reserve officials elevate policy communication to new levels. A typical FOMC statement will be published at 12:30 EST (17:30 GMT), and Chairman Bernanke begins a one-hour press conference at 14:15 EST (19:15 GMT). New macroeconomic forecasts are scheduled for 4Q12, 4Q13, […] More
Central Bank Watch
Bank of Thailand Cuts Interest Rate a Second Time
January 25, 2012
Following up on a 25-basis point policy interest rate cut on November 30th, Thailand’s Monetary Policy Committee reduced such again as anticipated to 3.0% from 3.25% and released a statement that asserted inflationary pressure "remains contained" and identified "global headwinds" that could "pose risks to Thailand’s economic growth." Not all of the drag on growth […] More
New Overnight Developments Abroad - Daily Update
Attention on FOMC and Davos
January 25, 2012
The annual World Economic Forum in Davos opens today with a speech from German Chancellor Merkel. A PSI agreement between Greece and holders of its debt still hasn’t been reached. The FOMC releases its policy statement at 17:30 GMT. This will be followed by forecasts including the interest rate expectations of individual members, and Fed […] More
Central Bank Watch
Analysts Surprised by Central Bank Decision in Hungary
January 24, 2012
Officials at Magyar Nemzeti Bank had raised their key base rate by 50 basis points each on November 30 and December 20 and were expected to do such a third time at today’s first policy meeting of 2012, but they instead left such unchanged at 7.0%. In all, there have been five rate hikes thus […] More
Central Bank Watch
Unchanged Turkish Monetary Policy Settings Following First Meeting of 2012
January 24, 2012
The monetary authorities at the Central Bank of the Republic of Turkey declined to change its policy stance, which had been tightened last October to prevent second-order effects from temporarily accelerated price increases late in 2011. The one-week repo rate, which is the primary policy rate, has been at 5.75% since last August, and there […] More
