monetary policy

It is not US fundamentals, but global fundamentals that will determine the Fed's ability to taper. If the Fed tapers when the global economy is already in the doldrums, as it is at the moment, the recessionary rebound to the US economy…

At 2PM ET today, the Federal Reserve is releasing the latest FOMC statement. Market players do not expect the Fed to taper its large scale asset purchase program because recent economic data in the US have been weak. Given controversial…

Fama has been doing research on QE for the last six months. And he basically tells Santelli that QE in the Treasury market is an asset swap of short-term government debt for long-term debt. Fama’s depiction of QE is accurate and mirrors…

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.

Federal Reserve Governor Stein: The traditional, pre-crisis framing of the question went something like this: Should policymakers rely on ex ante measures to lean against potential financial imbalances as they build up, and thereby lower…

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…

I was just re-reading Richard Werner’s initial quantitative easing scheme for Germany from 1995. What he says is relevant to today’s situation in Europe and the United States as well as for today’s Japan. I want to highlight a few lines…

People want to see tight fiscal policy and loose monetary policy if stimulus is necessary. That is current policy orthodoxy and it will continue to be the case until at least the next cyclical downturn. If policy makers can ride out this…

Just after I posted today, I ran across two posts from March that I wrote on government and private debt that are related to theme of today's commentary on potential housing bubbles in Germany and Sweden. I am writing here to more tightly…