The Wall Street Journal – As Inflation View Shifts, the Fed Might Floor It The Fed’s attention has been on the rapidly improving employment picture. This week, several economists suggested the Fed’s 6.5% unemployment-rate threshold for scaling back stimulus could be hit fairly soon. Before making a move on interest rates, though, a quick glance… Continue reading Inflation & The Taper
The Financial Times – Gillian Tett: Forget the Fed, prepare for Tokyo ‘taper’ If (or when) America’s central bank finally embarks on its taper, how will this affect markets? Or the central bank itself? That is a question investors and analysts are frantically debating now, as the next US Federal Reserve decision looms. But this… Continue reading Timing The Tokyo Taper
The Economist – New club rules Germans will soon have another reason to fume about the euro If the euro zone expands still further, the five big states will keep their four votes but the 11 remaining ones will be shared among ever more countries. If the euro area ever reaches 22 members, the second… Continue reading The Division Of Power In The Eurozone
Business Insiders – A Complete Guide To Investment Fads And Themes From 1996 to 2013 By far, the most important trend in investing this year was the anticipation and celebration of stock repurchases or share buybacks – the fuel that powered both corporate earnings growth and the ascent of the stock market. As some columnists… Continue reading Follow The Fads
The Wall Street Journal – Should the Fed Switch Its Benchmark Rates? The Federal Reserve is testing a new bond-trading program that is working so well, some influential people think it could lead the central bank to ditch its current policy lever — its federal funds rate target — in favor of this new program.… Continue reading Interest On Excess Reserves
The Economist – Hedge-trimming A new regulation that aims to pare risks in the financial system is likely to have the opposite effect TO COMPLY with all the new regulations aimed at preventing further financial crises, banks have already had to hire lots of lawyers. To comply with the Volcker rule, which was approved by… Continue reading Financial Regulation
The Economist – Spreading disarray Why the price of crude in America is out of whack with the rest of the world IT IS a common misconception that one barrel of oil is much like another. Crude varies by viscosity from watery to almost solid, by colour from fawn to deepest black and by sulphurousness… Continue reading Crude Oil
The Economist – House party American homeowners are finally returning to positive equity THE calamitous financial situation of “negative equity” is when the mortgage on your house dwarves the value of the house itself. That has been the situation of American homeowners in aggregate since late 2007, according to “flow of funds” data from the… Continue reading Home Equity
Bloomberg.com – Eurodollar Curve Aligns With Fed’s Lower-for-Longer Guidance Most Fed policy makers expect the first increase in its target rate for overnight loans between banks to occur in 2015, according to projections released on the same day the central bank completed a two-day policy meeting on Sept. 18. The federal funds rate target will… Continue reading The Eurodollar Curve And Fed Policy
The Wall Street Journal – Jon Hilsenrath: Fischer Poised to Be Picked as Fed’s No. 2 President Barack Obama is close to nominating former Bank of Israel chief Stanley Fischer to become the vice chairman of the Federal Reserve, according to a person familiar with the matter. Mr. Fischer would succeed Janet Yellen, who is… Continue reading Is Stan Fischer A Good Pick For The Fed’s #2?
The Wall Street Journal – Alan Blinder: The Fed Plan to Revive High-Powered Money Don’t only drop the interest rate paid on banks’ excess reserves, charge them If the Fed turned the IOER negative, banks would hold fewer excess reserves, maybe a lot fewer. They’d find other uses for the money. One such use would… Continue reading Will IOER Give Way To Reverse Repos?