Monetary System

What if the Fed Model is wrong? Perhaps it's the change in the level of interest rates that matters, not the level. So irrespective of how high interest rates are, if the change, the delta, is large enough, it will produce an economic…

Even the most dovish Fed officials are onboard with a regime shift toward an accelerated rate hike timetable. Boston Fed President Eric Rosengren has become hawkish. His remarks show that the Fed is now actively preparing markets for a…

We should look to the ECB more than the Fed now. The market has anticipated the Fed move. The ECB, SNB and BOJ moves are yet to come.

Federal Reserve Governor Lael Brainard has given a defining speech that marks a regime shift in US monetary policy. She says that economic headwinds that favored caution have turned to tailwinds. The implication is a more aggressive…

In the next recession, muni bonds will be hit and local governments will default. The Fed will use Section 13(3) of the Federal Reserve Act to buy municipal paper. And if they need even more authority, Congress will grant it.

The Fed as the monopoly supply of reserves can and will push the market until it cries uncle. Powell's testimony before Congress is the Fed Chairman's first warning shot. Caveat emptor.

Powell's testimony suggests the Fed will be more hawkish than the market expects. I believe long-term interest rates will grind higher. Look at the steepness of the yield curve for signs of over-tightening.

There is a notable lack of long-run analyses of monetary systems and their stability. This column addresses this gap by looking at the monetary systems of major European states between 1300 and 1914. The evidence collected suggests that,…

Productivity is an important yardstick for measuring the value of goods and services workers. A recent study by McKinsey demonstrates that wages and demand are key to raising it.

Low interest rates in the UK show how powerful expectations of future central bank policy action is on bond markets given rising inflation.