interest rates

I believe policy makers at the the Federal Reserve have soured on the marginal effectiveness of quantitative easing as a primary tool for monetary policy. As interest rate policy is still not effective with the policy rate at zero, forward…

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…

The central banks in Sweden and Germany are concerned about overheating economies as the European sovereign debt crisis has led to a net inflow of investment into their housing sectors. If one looks at European economic policy, these…

Long-term interest rates may have bottomed several months ago, but rate will remain low for several more months. For good reason, many observers and investors are concerned that the dysfunctional political system in the US will renew the…

Below are the video and some excerpts from a recent interview BlackRock CEO Larry Fink did with Bloomberg Television. The interview here is mostly about the effect of the government shutdown and debt ceiling crisis on the economy and…

The Bank of Japan was able to lower Japanese government bond yields after an unexpected spike earlier this year (see post). The 10yr JGB is now yielding around 70bp, corresponding to about minus one percent of real yield.

It is still too early for all of these predictions either to have materialized or to have failed, but I thought it might be useful to review them to see whether or not they have been reasonably accurate in describing unfolding events and,…

One could argue that home-buyers are ignoring higher rates, but that doesn't seem likely. Is this spike driven by capitulating buyers who had been waiting on the sidelines for mortgage rates to drop? That strategy had certainly worked in…

To put it mildly, the Fed’s dovish surprise has many implications for the market. The first is that the Fed is very concerned about the backup in US rates, and the negative impact on the economy. - The second major implication is that…