interest rates

One feature that is peculiar to the present downturn is the accumulation of reserves at the U.S. Federal Reserve. I imagine it is no different at other central banks, though I have not seen the data. Let me tell you what this reserve…

The US and the global economy are at risk of a severe stag-deflation, a deadly combination of economic stagnation/recession and deflation. Only very aggressive and co-ordinated policy actions will ensure the global economy recovers in 2010…

Japan’s policy makers generally procrastinated considerably in terms of implementing any kind of stimulative measures, as well as prematurely reversing the benign impact of policies which had some earlier success. In terms of monetary…

Recently, I have written quite a few posts demonstrating the U.S. Federal Reserve has a ballooning balance sheet as it increases its purchases of assets at an unprecedented clip. In fact, that balance sheet had $800 billion in assets just…

Angela Merkel, the German Chancellor has rebuked the United States for its easy money policies, suggesting it was kicking the can down the road and setting up a greater problem later. It is high time the debate about monetary policy made…

This chart and the commentary both come from FT Alphaville: A look at the Fed's balance sheet currently will tell you it's very much in the business of supporting liquidity/prices in assets other than Treasuries. The graph below is a…

Deregulation and laissez-faire orthodoxy bears much of the blame for the current economic mess we are experiencing. Dean Baker notes with chagrin that Barack Obama, who will take office as U.S. President shortly, has put some of the…

Below is a link to an article I wrote about the Bank of England's aggressive 1.5% interest rate cut that appeared in yesterday's Guardian newspaper.The unkindest cut, GuardianThe long and short of it is that I am very skeptical about the…

Central banks around the world are whacking interest rates at a breakneck clip. The Fed, the Reserve Bank of Australia, the Bank of Japan and now the ECB and the BoE. The BoE made the most dramatic move with an outsized 150 basis point…

The Bank of England has cut interest rates to 3%, a 1 1/2 point cut. Just weeks ago, the BoE Governor Mervyn King was writing to the Government explaining how they had let inflation run out of control. However, with the economy tanking,…