Economy

Weak inflation readings in the US continue provide the Fed with the rationale to maintain securities purchases in what amounts to a "QE trap". With the PCE inflation measure once again below one percent, the FOMC doves fear that "taper"…

The release of the first estimate of Q3 GDP was initially met with excitement as the headline print of 2.82% growth was far in excess of consensus estimates of 2.0%. Unfortunately, the euphoria quickly faded as the details painted a much…

Martin Wolf has written a column in the FT with which I agree, claiming that Germany is a weight on the world. The essence of his argument is that Germany’s export-led growth model is a ‘beggar-thy-neighbor’ policy in a world short of…

The US is now on track to reach only 1.6% real GDP growth for 2013 - in spite of the extraordinary amount of central bank stimulus. The sad part about this weakness is that to some extent it has been self-inflicted. Policy uncertainty,…

It is not US fundamentals, but global fundamentals that will determine the Fed's ability to taper. If the Fed tapers when the global economy is already in the doldrums, as it is at the moment, the recessionary rebound to the US economy…

During the government shutdown, the data for a variety of economic reports were halted. Therefore, I looked at alternative, private sector, data to estimate the government reports. One such model used the historical differential between…

The PMI survey shows the first fall in manufacturing output in the US since September 2009. Eurozone PMIs are moving in the other direction.

So imagine you are a moderate FOMC member. This is the economic situation you face and the trade-offs in terms of policy tools.

Here is an observation. The last couple of years show some interesting similarities to the period ending in early 2005. The reason for such a comparison is that then, just as now the Fed began to gradually exit its highly accommodative…

With Spain posting its first gains in GDP in over two years, every media outlet I have seen is trumpeting this as the end of the eurozone recession. I called it early, yes. However, one quarter’s GDP growth does not make recovery. Let’s…