Federal Reserve

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

U.S. Vital Signs When the FOMC Met Previously

August 10, 2010

Since the June FOMC statement was released, the dollar has retreated 6.2% against the euro and 4.5% against the yen.  Ten-year Treasury yields have declined another 30 basis points to 92 bps below their level when the Federal Open Market Committee met in late April.  The Dow Jones Industrial Index is 2.8% higher than its […] More

Long-Term Slumps in Stock Prices

May 20, 2010

In an update yesterday entitled U.S. Unemployment, CPI Inflation, Stock Prices and Fed Policy, I quantified several data trends, which make a rate increase by the Fed this year unlikely.  This posting looks in further depth at the prolonged weakness of stock prices, which is already more than a decade long.  It’s not limited to […] More

Next Week

April 23, 2010

A really exciting week lies ahead for economic data junkies and central bank watchers.  Thursday, April 29, sees the first of Japan’s four holiday closures, that being Showa Day to honor the Emperor’s birthday, followed by Constitution Day on Monday, May3, Greenery Day on May 4 and Children’s Day on May 5.  Together these off-days […] More

Reflections About the Fed on a Snowy Day

February 25, 2010

A key message of Fed Chairman Bernanke’s testimony this week has been that while improved financial market functionality warrant the gradual unwinding of unconventional measures, the economy is not ready for outright monetary tightening.  It may be an “extended period” before such a time arrives.  The point is not that the recovery that saw GDP […] More

Fed Statement As Expected

December 16, 2009

Analysts weren’t looking for any remarkable initiative in the FOMC statement, and that’s what they got.  Economic conditions are better from the standpoint of the employment situation, income growth and financial market conditions, but officials reiterated that “exceptionally low levels of the federal funds rate” are likely “for an extended period.”  I’d bet this pretty […] More

Vital Market Prices at the Time of Prior FOMC Meetings

December 16, 2009

The FOMC is not expected to change its Fed funds target, nor is the conditional guidance that “exceptionally low rates for and extended period” likely to get modified further.  The last statement of November 4 made news by imposing three conditions to that pledge: low resource utilization (which can be determined from the jobless rate […] More

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