monetary policy

Due to the continued high rate of unemployment, the Federal Reserve today took an aggressive policy stance that is being dubbed QE3. The Fed will purchase $40 billion mortgage bonds per month and extend the maturity of its holdings of…

The Federal Reserve Board issued the following statement in conjunction with the FOMC's decision to begin an aggressive round of quantitative easing. Information received since the Federal Open Market Committee met in August suggests that…

Ray Dalio spoke with Maria Bartiromo at the Council on Foreign Relations this morning about a number of economic and financial topics. Dalio covered a number of topics including deleveraging the euro crisis and alternative investments like…

Here's a good essay from the St. Louis Fed, examining how effective 'permanent zero' rates are. As you know, I think permanent zero is toxic. Let's see what the St. Louis Fed is saying though. Since the late 1980s the Federal Open Market…

By Sober Look With the GSEs (Fannie Mae and Freddie Mac) forced to shrink their balance sheets (see discussion), the private sector will need to step in. As demand for mortgages increases with the growth of the US population (see…

Even before the crisis, there were some who stressed that monetary policy should keep an eye on asset bubbles and the growth of credit. This column argues that the policy of inflation targeting, used widely in the 1990s and 2000s, did…

A friend tipped me off to this BIS paper from 2009. It looks into unconventional monetary policy and the inflationary consequences of adding a huge amount of reserves to the system. The abstract reads as follows:  Abstract The recent…

By Marc Chandler The US dollar is consolidating last week's losses in largely uneventful activity.  In fact, consolidation is the general theme in the broader capital markets as well.   Equity markets are narrowly mixed, with the MSCI Asia…

By Marc Chandler The US employment data is an important disappointment, especially coming on the heels of yesterday's ADP and service ISM reports that had lifted expectations. The private sector created a net 103k jobs, well below the 143k…

I want to highlight the end of Fed Chairman Ben Bernanke's speech at Jackson Hole yesterday because he reiterated something he has been saying for a while now - that the Fed will do more but it won't be able to save the day by itself. I…