The ECB wants everyone to know that it is in control, and therefore has everything under control. Through an almost certainly carefully placed leak, European central bank officials have let it be known current monetary policy is practicing a kind of yield curve control. Not just the usual QE in terms of bond buying, but tailoring specific parameters within the [...]
One of the concepts educators sort of snuck into the curriculum was something they called “moral suasion.” This term has meanings outside of Economics, but within the discipline it refers to one key element to the monetary policies of central banks. Basically, persuading markets or economic groups to act in the way officials want using rhetoric or threats without having [...]
They were never very specific to begin with, even in Ben Bernanke’s infamous November 2010 Post op-ed covering the start of QE2. Officials like to keep it purposefully vague as a kind of dry powder, a margin for error. If bureaucrats become too specific, the public would reasonably hold them to their own standard being laid out. The point behind [...]
Between November 1998 and February 1999, Japan’s government bond (JGB) market was utterly decimated. You want to find an historical example of a real bond rout (no caps nor exclamations necessary), take a look at what happened during those three exhilarating (if you were a government official) months. The JGB 10-year yield had dropped to a low of just 77.2 [...]
You’d think Larry Summers would know better. Not that he stepped in it, again, but rather why he did this particular time. Making a big deal out of inflationary aggregate demand when he’s been practically the lone mainstream Economist to look at the post-2008 economy in an honest and serious fashion to then somehow failing to incorporate that view into [...]
The people who believe they are the Federal Reserve’s biggest critics are actually Jay Powell’s most vocal supporters right now. Rather than being bothered by all the “Weimar” memes and printer-go-brrrrr jokes, US central bank officials welcome such free press (pun intended). Anything that contributes to the idea there will be inflation – a little or a ton – helps [...]
It has happened more frequently the past few days. The difference between the equivalent yield for the 6-month (26-week) Treasury bill and its cousin with a 1-year (52-week) maturity has turned negative. You have to watch for it intraday, catching it flipping occasionally back and forth by fractions. After hours more than regular trading.Inversion, in other words. That dirty term [...]
They really got carried away, though in the context of that time there seemed any number of legitimate reasons for this. Gold investors were bidding up the precious metal like there was some kind of shortage, the price in dollars making a new record high (LBMA morning fix) on August 7. The way it was reported in the mainstream, this [...]
Macroeconomic slack is such an easy, intuitive concept that only Economists and central bankers (same thing) could possibly mess it up. But mess it up they have. Spending years talking about a labor shortage, and getting the financial media to report this as fact, those at the Federal Reserve, in particular, pointed to this as proof QE and ZIRP had [...]
I’m not exactly sure how you translate the English word “hope” into Chinese, though Google’s translate algo tells me this is what it’d be: 希望. For the global economy to have any chance of just making next year less awful than it’s already predicted to be (by the optimists), the OECD declared China essential to the fanciful anticipation.As noted before, [...]
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