United States

Over the past few months, the world’s central banks have turned to forward guidance as a central focus of monetary policy. This tool is untested as a central component of monetary policy and has been thrust into the spotlight only because…

The following are prepared remarks by Janet Yellen for her first meeting with Congress after being nominated to replace Ben Bernanke as the Federal Reserve Chair

Earlier today, I indicated that comments by Fed President Dennis Lockhart clearly indicated that the Fed was poised to shift away from quantitative easing and toward forward guidance to guide future Fed monetary policy. But Lockhart gave a…

Weak inflation readings in the US continue provide the Fed with the rationale to maintain securities purchases in what amounts to a "QE trap". With the PCE inflation measure once again below one percent, the FOMC doves fear that "taper"…

Below is the text of a speech delivered on Friday by Federal Reserve Chairman Ben Bernanke on the recent financial crisis and its similarities to financial panics like the Panic of 1907 (which led to the founding of the Federal Reserve in…

Everyone is familiar with the fact that Federal Reserve Chairman Bernanke’s second term as Chairman is drawing to a close. Janet Yellen is widely expected to ultimately be confirmed by the Senate. What is less appreciated is that the…

The release of the first estimate of Q3 GDP was initially met with excitement as the headline print of 2.82% growth was far in excess of consensus estimates of 2.0%. Unfortunately, the euphoria quickly faded as the details painted a much…

Recently, I wrote a series of posts predicting that the Fed would give up on QE and move toward forward guidance in order to be able to normalize policy. Nevertheless, I have also been saying for quite some time I believe the US zero rate…

While the US housing market remains relatively robust, it is likely to face a couple of headwinds going forward. One is the lower affordability index. The other is the recent slowdown in net household formation.

With wages stagnant, the proportion of income going into rent is on the rise. While homeowners have been able to reduce their monthly payments to the lowest level in decades via mortgage refinancing and cutting back on credit card usage,…