The BLS giveth, and the BLS taketh away. That’s not really what has happened, of course, but for many it can seem that way. February’s payroll report obviously stands in striking contrast to January’s. The latter was a blowout, over +311k (revised), hyped near and far as proof of decoupling, the US economy the only clean shirt. In comes the [...]
What just happened in Europe? The short answer is T-LTRO. The ECB is getting back to being “accommodative” again. This isn’t what was supposed to be happening at this point in time. Quite the contrary, Europe’s central bank had been expecting to end all its programs and begin normalizing interest rates. The reaction to this new round was immediately negative: [...]
The OECD has become the latest mainstream Economist outfit to relent on growth. Two years ago, they had grown cautiously optimistic as reflation appeared in the back half of 2016. By the middle of 2017, positively giddy barely able to contain their increasingly rabid excitement: The global economy is now growing at its fastest pace since 2010, with the upturn [...]
The concept of an economic “false dawn” was almost entirely unfamiliar to the postwar US experience. We came close in 2002 and the first half of 2003, but eventually the housing bubble era took over. The dot-com recession was mild, sure enough, somehow, though, recovery seemed so elusive for a longer period than the contraction itself. There is supposed to [...]
These things have typically started in global trade. This makes sense given what we are dealing with are intermittent problems in global money. Quite simply, you can’t trade if you can’t get any. Therefore, the more acute the dollar shortage the more disruptive to the global merchandise economy. The one exception to this pattern was the first. Euro$ #1 registered [...]
China’s central bank was given more independence to conduct monetary policies in late 2003. It had been operating under Order No. 46 of the President of the People’s Republic of China issued in March 1995, which led the 3rd Session of the Eighth National People’s Congress (China’s de facto legislature) to create and adopt the Law of the People's Republic [...]
For the last several years, the US recovery following its experience with the global 2015-16 downturn has been lacking in several key dimensions. Reflation #3 in the real economy has reflected the lack of momentum and altitude in the snapback across the eurodollar system. As such, of all the reflation episodes this last one was upside down; it was by [...]
While still a professor of Economics at Princeton, future Federal Reserve Chairman Ben Bernanke was also a Research Associate for the NBER. In 1999, in his capacities with the latter organization, Bernanke advocated for widespread adoption of inflation targeting. At that time, only a few central banks had experimented with it and there wasn’t much evidence for its effectiveness. Publishing [...]
More than any conundrum in the bond market, the Federal Reserve has one on its hand much closer to home. Its home, anyway. The effective federal funds rate (EFF) has been stapled to IOER for each of the last fifty trading days. No variation whatsoever. EFF had converged with IOER back in October. A lot of ugly things began to [...]
There is much more chicken to each hawk than any of the birds would care to admit. What I mean by that is fairly straightforward, or it should be. Alan Greenspan was resolute. Right or wrong (the latter, trust the curves), after taking federal funds down to 1% officials pushed the rate right back up to 5.25% without pause. At [...]
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