forward guidance

I am concerned about what is happening in the emerging markets but not alarmed. Fed tapering was a proximate trigger but not a cause. All indications are that the crisis is hitting only the most exposed and vulnerable markets and that this…

The issue should be well known for US economy watchers. The unemployment rate has declined noticeably but if we factor in the declining labour force participation rate the picture looks largely unchanged. Should the Fed, then, shift focus…

Yesterday, the FOMC decided to reduce the pace of its large scale asset purchase program from $85 billion per month to $75 billion per month. The Fed has long wanted to taper its LSAP program and move to forward guidance to normalize policy…

The big policy and market issue today is Federal Reserve policy. There is widespread interest in today’s FOMC meeting because of the possibility that the Fed could taper the pace of its large scale asset purchase program. But why is there…

Today is the day when the much anticipated jobs report was released. And the data were good. The jobs report was not the big news in my view, however, because at the same time we saw the jobs numbers we also got personal income numbers -…

Below is the full text of a Speech by Federal Reserve Chairman Ben Bernanke on communication and monetary policy that includes his view on the Fed’s large scale asset purchase program. His ideas give greater clarity to how the Fed thinks…

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…

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…

Over the past few months, the world’s central banks have turned to forward guidance as a central focus of monetary policy. This tool is untested as a central component of monetary policy and has been thrust into the spotlight only because…

In September I wrote that I expected the Fed to establish a lower bound for inflation threshold as one of its next moves. The rationale was two-fold. First, inflation is undershooting and the Fed needs policy space to deal with unwanted…