Federal Reserve

Three Shocks Slam Global Financial Markets

December 11, 2015

Stocks are plunging and the 10-year Treasury yield fell seven basis points today in response to three developments. Oil prices fell 1.2% to $36.33 per barrel. ┬áCommodities were hit by a projection from the International Energy Agency that the global oil surplus will persist for another year. China’s central bank website announced plans for the […] More

Might the Dollar Finally Be Embarking on a Substantial Uptrend?

August 6, 2014

For some time now, the potential for significant dollar appreciation against other advanced country currencies has been widely apparent based on divergent monetary policies and the greater economic vulnerability of Europe and Japan to a geopolitical landscape that’s deteriorating by the the week.  If the dollar is has begun a big move, these remain early […] More

Uneventful FOMC Meeting as Expected

April 30, 2014

A statement released after the two-day Federal Open Market Committee meeting this week reads almost identically to the prior March 19 statement.  The few changes made involved the first paragraph mostly, which deals with the committee’s view of economic conditions.  As at the three prior meetings in December, January and March, monthly purchases of mortgage-backed […] More

FOMC Plows Forward with Measured Tapering

January 29, 2014

The decision to cut monthly purchases of mortgage-backed securities and longer-term Treasury Securities by $5 billion apiece matched analyst and investor expectations exactly and brings the cumulative combined lessening of quantitative stimulus to $20 billion per month from $85 billion to a new level of $65 billion.  The $85 billion amount was introduced in September […] More

Fed Chairman Succession Timelines

July 17, 2013

It seems nearly certain that Ben Bernanke will not serve a third consecutive four-year term as Fed Chairman.  His stewardship ends on January 31, 2014. Fed Chairmen are appointed by the president, subject to senate confirmation.  Bernanke’s immediate predecessors were Paul Volcker and Alan Greenspan. The selection of Greenspan was announced by President Reagan on […] More

Bernanke Press Conference Highlights

December 12, 2012

Several questions were directed at the fiscal cliff, a term first suggested by Bernanke.  He felt the metaphor was still good and didn’t support the position of some that if a deal can be reached a couple of weeks into 2013 that the damaging effect would be only slight.  He reiterated that the Fed doesn’t […] More

Anticipating Coordinated Monetary Easing as Reported Data Were Mostly Soft

July 30, 2012

Share price gains overnight continue to reflect optimism that the ECB will take forceful action Thursday to preserve the euro.  Stocks are up 1.9% in Spain, 1.0% in Germany, 0.8% in France and 0.6% in Britain.  In the Pacific Rim, equities climbed 1.8% in India, 1.6% in Hong Kong, 1.1% in Singapore and the Philippines, […] More

When Humphrey Met Sadie and What the Fed Wants Us to Know

February 29, 2012

Federal Reserve Chairman Ben Bernanke gave Humphrey Hawkins testimony before the House Financial Services Committee on this Sadie Hawkins Day of 2012.  The dual references to Hawkins, one for the testimony and the other for the day, are a curious happenstance.  The testimony is called Humphrey Hawkins for the two sponsors of the 1977 Full […] More

FOMC Statement: Further Initiatives Not Expected and Not Delivered

November 2, 2011

Today’s statement from the Federal Open Market Committee acknowledges that growth strengthened last quarter partly on a reversal of temporary factors.  But the views are retained that the declining pace of “elevated” unemployment toward the central bank’s desired range will be only gradual and that inflation is likely to “settle, over coming quarters, at levels […] More

Dovish Tones in Bank of England and Fed Reports

October 20, 2010

It has become gospel in central banking circles that important policy changes must be communicated clearly in advance in order to produce desired market reactions.  Minutes from the Bank of England’s October 6-7 meeting and the Fed’s report on regional economic conditions, known as the Beige Book, constitute an education of the public to anticipate […] More

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