One more post on the FOMC statement as I think it is vitally important in the context of financial function. I already covered the economic end of it, which is comparatively undesirable itself, but the only mention of repo in the statement was in reference to the assumed high degree of effectiveness of the reverse repo/IOER “floor” the Fed has [...]
The FOMC policy statement confirms without much doubt that there has been a major shift in conditions and outlook. To reiterate in what cannot be overstated, the purpose of implementing QE was to create economic conditions that conformed to the historical understanding of economic growth. If not so much 1995, Bernanke’s FOMC wanted to return to at least 2005 and [...]
More of the same from Janet Yellen in her latest speech, but her focus on “resilience” caught my attention as it relates to very recent developments. The taper threat experience last year may have been a warning, but it doesn’t seem like it resonated with her or policymakers. The major bond selloff, which led to global ripples of crisis in [...]
My colleague Margie Fernandez flagged a research report from Oppenheimer on the ongoing Basel implementation. It has been calculated, through various methodologies, that the implementation of both Basel III and Dodd-Frank may be “upwards of 15% of operating profits of small banks.” Now it should be noted that these figures were derived from a meeting with Frank Keating, former governor [...]
With the pressure on for the economy to deliver a robust rebound in the current quarter just to maintain even the semblance of hope for 2014, the latest durable and capital goods estimates are unwelcome. Various sentiment surveys show extremely robust index levels, but such mathematical constructions tell us absolutely nothing about the absolutel level of attainment, measuring only relative [...]
In light of the enlightening of the full-scale of the first quarter’s disaster, it seems fitting to calculate the FOMC’s growth target with this new information. The current “central tendency” is estimated between 2.1% and 2.3% for calendar year 2014. Given these revised figures, the target for average real GDP of $16.084 trillion, just to get to 2.05%, is inordinately [...]
After marveling at the speed at which the FOMC downgraded, once again, its over-optimism regarding 2014 growth, my good friend Fred Everett started to calculate exactly how daunting a task even hitting the lower end of the reduced range actually might be. It’s not just the misstep in Q1 that is the problem, it is the sometime tortuous nature of [...]
“My guess is that we will see some pickup as we get into the second half of the year, but the longer we go without getting the 3% growth that many people had in their forecasts, the more concerned you have to be that there are other things going on that we hadn’t fully appreciated,” Eric Rosengren, president of the [...]
The occasion of this year has lent itself to what I sense is more and more the drive to set down “history” before a full review can coalesce interpretations that might not be kind. I’m talking about Ben Bernanke now “speaking his mind” and the cast of 2008 writing books to tell their side. It is highly natural of any [...]
Back in September 2012 at the press conference for Ben Bernanke’s announcement of QE, the Chairman was asked point blank by Pedro da Costa of Reuters about perceptions of it being a program that seemed more directed toward Wall Street than Main Street. The answer was the standard boiler plate assumptions that orthodox economists make in terms of aggregate demand. [...]
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