In June 2012, Janet Yellen, then the Vice Chairman of the Federal Reserve, addressed an audience in Boston with what for the time seemed like a radical departure. It was the latest in a string of them, for conditions throughout the “recovery” period never did quite seem to hit the recovery stride. Because of that, there was constant stream of [...]
Primary dealer holdings of UST securities have been on the rise again. This sort of warehouse activity is drastically misunderstood, exemplified best when last year around this time surging dealer inventory was blamed on those banks’ purported inability to sell off their holdings. It was an absolutely absurd idea for several reasons, but most prominently the overwhelming demand at the [...]
Since there isn’t any detectable acceleration in wages or earnings, the plateau across the JOLTS data dating back to various points in 2015 is therefore not likely to be related to the presumed end of labor market slack. Even if the unemployment rate were a valid and relevant interpretation of “full employment”, there would be no reason why businesses might [...]
In the early trading on Friday, it looked as if “reflation” might break down entirely. The flurry of information seemed to be uniformly bad, from Syria to payrolls there wasn’t much for optimism to remain relevant. All of a sudden, however, it all reversed so that trading in the latter part of the day was as if related to an [...]
On July 20, 2007, the much discussed slow-walk implementation of the Basel II framework was finally taking its form. The Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, and the Federal Reserve Board of Governors, all government agencies dealing in bank supervisory powers, issued a joint statement that day announcing an [...]
You may or may not know much about forward guidance, but it has been of constant attention on the minds of policymakers. Further, policymakers themselves don’t seem to be able to define it, and because of it they can’t seem to solve the bond market puzzle. In orthodox economics, forward guidance is either “Delphic” or “Odyssean.” As usual, there is [...]
Bundesrepublik Deutscheland Finanzagentur GmbH (German Finance Agency) was created on September 19, 2000, in order to manage the German government’s short run liquidity needs. GFA took over the task after three separate agencies (Federal Ministry of Finance, Federal Securities Administration, and Deutsche Bundesbank) had previously shared responsibility for it. On September 17, 2014, almost exactly fourteen years later, GFA managed [...]
It is hard not to notice that the chart above has a lot less red in it than it has in some time. That is true of the month to month data as well as the year over year changes. There has been a widely reported gap between so called soft data - surveys and polls - and the hard [...]
The idea that interest rates have nowhere to go but up is very much like saying the bond market has it all wrong. That is one reason why the rhetoric has been ratcheted that much higher of late, particularly since the Fed “raised rates” for a third time in March. Such “hawkishness” by convention should not go so unnoticed, and [...]
Wholesale sales rose 5.3% in February 2017 year-over-year after jumping by more than 12% in January on oil effects. Like calculated inflation rates, wholesale sales are for now marginally determined by energy price comparisons as well as calendar effects. February 2017 had one fewer day than February 2016, which according to the Census Bureau’s seasonal adjustments played some significant role [...]
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