Whether we notice them or not, there are a lot of things that do happen on a seasonal basis. Economists have tried to eliminate these patterns from our thoughts and analysis largely by smoothing them out with seasonal adjustments. But in money as markets there remain these bottlenecks. People have asked me from time to time why I use the [...]
We ended last week on a pretty sour note. The eurodollar futures curve has inverted ever so slightly, which isn’t a very good sign of things to come. Since the inversion has to do with different pressures pressing on different parts, convention pays all attention only to the front. It’s there where the Federal Reserve acts out its forecasts. Because [...]
The eurodollar futures curve has already turned on them. That’s why the sudden interest in things like federal funds futures. If it seemed yesterday with the release of the last meeting minutes that the FOMC members appear to be getting nervous, there is good reason. The eurodollar curve is already slightly inverted. Remember, these contracts deal with probabilities and distributions [...]
Inflation hysteria and the boom hysteria may both seem like they are one and the same thing. They are related, sure, and they represent similar objects. However, there are subtle differences. The mania over inflation, for example, has subsided while the one about the economy reaches its own feverish pitch. In early June, Newt Gingrich appeared on ABCNews’ The View [...]
CNY has held up over the last few days after Chinese officials intervened. Central bank actions like these tend to work if only over the very shortest timeframes. The tentative calm there, however, hasn’t extended universally. Copper, for one, has fallen right out of its Reflation #3 range. Selling off solidly for almost a month now, today it was pounded [...]
How bereft of ideas might they have to be to fall back on IOER? It’s scandalous, really. But the Federal Reserve in terms of intellectual property belongs on the TV program Hoarders. They never throw anything away, so attached do they become to whatever ineffective idea implemented at any time. Practical experience is in their practice impractical evidence. It’s all [...]
I don’t know if I should make this a regular feature or not, but IOER is the one monetary policy factor that maybe is easiest enough to understand and therefore the quickest route for the public to get to they really don’t know what they are doing. Federal funds aren’t some obscure way off policy goal, it’s the very lever [...]
That didn’t take long. The Fed’s IOER scheme lasted all of three trading session. That it was broken yesterday of all recent days isn’t surprising, at least when you realize the full range of things going on yesterday. First, a review: The issue this week, perhaps, is again EFF only this time the effective rate is pushing a little too [...]
As anticipated, the FOMC voted on both proposals in front of it. There should only be the one, but even routine monetary policy no longer is. Alan Greenspan’s Fed charged ahead with seventeen consecutive moves (the last few completed under Ben Bernanke) with little discussion about uncertainty in the economy (though there was, conundrums and all) let alone in the [...]
The FOMC is almost certainly going to raise the federal funds corridor today. The only question is whether IOER and RRP will go up by the same amount. The issue with federal funds as an offshoot or reverberation of what really matters (offshore) should take center stage, but it won’t. Instead, the Committee will pretend this is about wages. They [...]
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