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Bullard pushes inflation floor threshold, says tapering on table for December
St. Louis Federal Reserve President, James Bullard, spoke to Bloomberg News Editor in Chief Matthew Winkler this morning at Bloomberg’s The Year Ahead 2014 conference in Chicago. What he said there confirmed my comments las week about the…
Thoughts on the coming forward guidance policy shift
As I have been intimating for the last few months, the United States is in the midst of a regime change in monetary policy. We are moving from quantitative easing to forward guidance as the main unconventional policy tool to guide Federal…
Monetary ease, Grantham on overvaluation and the bubble in bubbles
The macro debate today is about secular stagnation and the correct policy response to deal with it if it exists. With that backdrop, it is interesting to read Jeremy Grantham’s latest quarterly letter to investors, which sounds a word of…
The four forces now shaping the global investment climate
There are four main forces shaping the immediate investment climate and these remain essential unchanged: 1) Fed tapering not expected until late Q1 14. 2) ECB will likely take additional action to ease financial conditions and…
Four key trends developing as a result of the rise in US mortgage rates
The recent increase in long-term rates is causing major changes in the mortgage markets. Here are some key trends
Larry Summers expects a long winter
After having been considered to head both the Federal Reserve and the Bank of Israel earlier this year, Lawrence Summers has been propelled back into the center of the broader economic dialogue with a speech at a recent IMF Economic Forum.…
Five years of QE and the distributional effects
As we approach the fifth anniversary of the start of the first quantitative easing program, some are asking the thorny question about the so-called "distributional effects" of these unprecedented programs. Who really benefited since the…
Thresholds versus Triggers
Fed Chair nominee Janet Yellen believes that the Fed will keep rates at zero long after the 6.5 unemployment threshold, according to news reports. Yellen made the comments responding to an inquiry by Massachusetts Senator Elizabeth Warren…
The limits of monetary policy, part 2
In the aftermath of the financial crisis, policy makers’ aversion to fiscal policy is still large. So monetary policy rules the roost. With developed economies burdened by low growth, unemployment, and high levels of debt, monetary agents…