The primary reason I focus so much on time is that I believe it is running out. No one possesses a crystal ball, least of all me, and while making such a statement might presume to be intensely negative (doom and gloom) it’s not always that way and it certainly doesn’t have to be. For all the innumerable frustrations, there [...]
Even after several years of them, monetary policymakers continued to tread carefully with large scale asset purchases (LSAP). Otherwise known as quantitative easing (QE), in the US they were first announced all the way back in the darkest days of global financial panic in 2008. Yet, in 2012 and 2013 concerns remained that they could prove too powerful. Then-Richmond Fed [...]
It’s worth revisiting the topic of the “rising dollar.” What determines its exchange value in the first place? Orthodox convention associates the general direction up or down with interest rate differentials, the infamous global carry trade. Not just any interest rate comps, either, but those of short-term money markets. Thus, if the Federal Reserve is “raising rates” as it has [...]
Thomas Hoenig was President of the Federal Reserve’s Kansas City branch for two decades. He left that post in 2011 to become Vice Chairman of the FDIC. Before that, Mr. Hoenig as a voting member of the FOMC in 2010 cast the lone dissenting vote in each of the eight policy meetings that year (meaning he was against QE2, too). [...]
Today for the first time in over a week, HKD moved. That’s not unsurprising, as we should expect that nothing goes in a straight line – even devaluation of this kind. The issue is more about why it might have moved, or what it cost to move it. The Hong Kong Monetary Authority (HKMA) had started carefully. They were only [...]
At their December 2017 policy meeting, the FOMC majority voted to increase the monetary policy targets (RRP & IOER) by an additional 25 bps. It was the fifth such move dating back to December 2015. It was not, however, a unanimous decision. Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari both opposed the “rate hike.” At a [...]
February was a very interesting month, wasn’t it? There was the pause or even end of the inflation hysteria driven home by “unexpected” liquidations in markets all over the world. On top of those, LIBOR-OIS blew out and all the absurd explanations put forth for it, and even outright lies. Needless to say (write), I’ve been waiting for the TIC [...]
Beginning with its very first issue in May 1915, the Federal Reserve’s Bulletin was the place to find a growing body of statistics on US economic performance. Four years later, monthly data was being put together on the physical volumes of trade. From these, in 1922, the precursor to what we know today as Industrial Production was formed. The index [...]
Throughout much of last year, we were told repeatedly that the PBOC was tightening monetary policy. China’s central bank had raised its reverse repo rate twice early on, and then once more last December (and would do so again just last month). These moves coincided with Federal Reserve “rate hikes”, seemingly in line with the whole idea. Not only that, [...]
There's a lot wrong with LIBOR, they say. Even if there is, this surely isn't any better. The world sees them as the ideal technocrats, the best and brightest. They are, and have been, the Keystone Cops. The Federal Reserve Bank of New York said Monday it had mistakenly included certain repo transactions in the settings for April 2 to [...]
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