There had been whispers that the FOMC would have to undertake a second “technical adjustment” this year. Is it coincidence that the eurodollar futures curve inverted on the same day, June 13, Jay Powell announced the first one? Perhaps, but given what we are talking about here there is a fair chance they are related, especially in the close aftermath [...]
In June 2003, while discussing the vote that would take the federal funds rate to its then-lowest point, 1%, Alan Greenspan committed what may have been the greatest monetary sin of modern times. The focus for much of the discussion was Japan, that country’s central bank pioneering at that early date all the things the Fed and other majors would [...]
It sounds a little like regret. It also leans in the direction of confirming that policymakers know they’ve messed up, big time. This has become the established pattern, for good reason. What they don’t know, to our collective downfall, is what to do about it. They’ve decided just to pretend while in office it didn’t happen the way it actually [...]
It’s hard to believe it was only about three months ago. Time flies when disaster unfolds all around you. In early June, Brazil’s central bank arranged a press conference where its President Ilan Goldfajn would set everyone straight. The currency was falling, he admitted, but it would be easily handled by closely following the Portuguese version of the global central [...]
It’s been a few years since Japan’s top central banker has been invited to Jackson Hole. The Kansas City branch of the Federal Reserve is today hosting the opening of its annual symposium. Typically, the introduction is given by the President of the KC Fed and then opening remarks from whomever is Chairman of the FOMC. Outside of those, the [...]
The FOMC statement for the July-August 2018 policy meeting exceeded expectations once more. It’s difficult for the Committee to continually do this since the whole point of these things is to downplay all expectations. The goal is to make everything seem boring and uninteresting, if the Federal Reserve is doing its job. But they are always interesting because nothing over [...]
Jerome Powell will make his fourth required appearance of 2018 on Capitol Hill today. The Full Employment and Balanced Growth Act of 1978 required a great many things when it was passed forty years ago, among them a degree of forced monetary competence to be at least displayed publicly by the Federal Reserve. The charade of Congressional testimony is what [...]
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 [...]
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