monetary policy

For my part, I am with Richard Koo. Monetary policy reflation will not work in a balance sheet recession when fiscal policy is contractionary. But at some point, the Fed will be compelled to act anyway.

The Chinese Seven Day Repo Rate has skyrocketed to a 3-year high, suggesting a cash shortage as credit tightens.

Dollar firmer across the board after profit taking capped losses; growth concerns still abound. Greece secures confidence vote, next hurdle is austerity vote; market focus shifts to FOMC meeting. Brazil likely to keep inflation target of…

Last week, when discussing what QE3 could look like I indicated that were the Federal Reserve to start expanding its balance sheet, QE3 will see interest rate caps after a pause and period of reflection. Let me address the differences…

A video debate between Brad DeLong and Jim Grant on the necessity and efficacy of another round of quanttative easing

Marshall Auerback and Rob Paenteau explain a method the Fed might use to target interest rates further out on the yield curve.

While I acknowledge the real fears that central bankers have about the impact of a restructuring, this political dithering is making matters considerably worse. Clearly, burden sharing is needed and that means bondholders will have to take…

Yesterday, I indicated that the FOMC has already considered offering unlimited quantitative easing to target specific interest rates during the second round of quantitative easing. I believe the Fed will do this in QE3, and apparently Bill…

Unfortunately, the US economy has weakened somewhat and so the speculation about QE3 has gathered apace. Let me say a few words on this topic here.

In this column, Marc Chandler argues that US monetary policy can be a powerful tool, but it has limitations. Some commodity prices have risen and some have fallen since the Federal Reserve signaled QEII. The anticipation of QEII did weigh…