WHAT THE CENTRAL
BANK IS DOING (AND SHOULD DO)... AND WHY IT MATTERS
One Small Step -- In the
November 23, 2015
The Fed seems committed to a deflationary policy error. Hopefully it
will be a small one.
FOMC: The Lady or the
September 15, 2015
Markets have already done the tightening -- and Yellen likes keeping us
"Patient" is a Virtue
March 16, 2015
Will she or won't she? Our FOMC language sweepstakes entry: Yellen will
keep the word in.
The Fed's Growth-Friendly
September 19, 2014
Treasuries are waking up to what stocks have known all year: "the Yellen
Rule" could work.
It's Yellen's World, and
We're Just Living In It
June 18, 2014
Where yields have to go down to go up, and inflation is above 2% so
prices can be stable.
Bernanke's Last Big Call
January 21, 2014
It takes two tapers to make a trend, and a locked-in
fait accomplis for Yellen.
Stanley Fischer: Game of Chairs
December 12, 2013
brilliant man supposed to play Dick Cheney to Janet Yellen's George W.
Yellen and Screamin' at the
December 5, 2013
Bernanke may taper in January, to defer the day when the FOMC rejects
So Welcome to the Yellen
November 15, 2013
Rigid, dogmatic, nervous, poorly prepped -- and willing to deny the
facts to defend policy.
July 11, 2013
As he ponders his legacy, he says don't worry about tapering: QE never
Taper Your Tapering
June 27, 2013
Threats in credit markets, and weak data, make it unlikely the Fed will
taper as planned.
To Taper or Not to Taper?
June 17, 2013
Rising Treasury yields may be saying the Fed doesn't need so much foam
on the runway.
QE Steps Down Before Bernanke Does?
May 23, 2013
His signal was unmistakable.
But with deflation risk increasing, he can't follow through.
2013 Outlook: Doves Ruled
Out at the Fed
January 25, 2013
By its own formulas, asset purchases ought to stop this year, and rates
hikes start in the next.
September 18, 2012
Less than meets the eye for the economy, but more than meets the eye for
When Bernanke Talks, People
March 1, 2012
It would take an economic miracle to cause the Fed to tighten. Don't bet
FOMC Preview: In Praise of Ben Bernanke
June 22, 2011
QE2 complete -- the Fed's just right. No QE3 unless unemployment rises
or inflation falls.
This Hawk has Flown
February 11, 2011
With Kevin Warsh's departure, the Fed loses is best-respected voice for
Good Problems to Have
January 14, 2011
The Fed won't go broke (at
least not on paper), and rising rates won't squelch growth.
Sell on the Leak?
October 27, 2010
The new conventional wisdom is QE will be small -- but committees do
Dialing Down the Drama at
September 16, 2010
Gold's new highs means the Fed's reflation campaign is already starting
When PhD's Attack
August 25, 2010
Markets will flail until the academics who run the Fed stop theorizing
and get real.
What Should the Fed Do?
August 5, 2010
There's one policy option for next week's
FOMC that would be both powerful and gradualist.
No QE2 Yet -- Just QE 1.1
July 22, 2010
disappointed the "double dip" crowd, but it was still a step toward more
How to Ease, Not When to
June 23, 2010
FOMC will take the first tiny steps down the path to further easing.
The Scariest Chart in
Tuesday, April 27, 2010
The FOMC meets, facing a secular breakdown
in the labor market.
March FOMC Preview
March 15, 2010
"extended period" language will stay -- there's just no reason to drop
February 24, 2010
SFP is complete at $200 billion, excess reserves will top today's $1.137
Ben Can, But Ben Probably
February 10, 2010
The Fed has the tools to "exit," but using them correctly remains a
Advice and Dissent
January 28, 2010
Hoenig's protest notwithstanding, jobs and politics have the Fed on hold
New Year, Same Old Fed
January 4, 2010
The new wave of economic optimism isn’t moving the Fed toward serious
Sucker Trade: Inflation
December 17, 2009
Citing the lessons of the 1970s, the Fed seems ready to repeat its
mistakes of the 1970s.
Easing -- As in Appeasing
November 23, 2009
Gold soars as the Fed resists politicization by giving politicians the
easy money they want.
October 27, 2009
Next week the FOMC will repeat its assurance to keep rates low for "an
September 28, 2009
Okay, so the Fed won't be easy forever. Just
September 11, 2009
Greenspan belatedly returns to the
gold standard, but the Bernanke Fed isn't following.
August 26, 2009
For good or for ill, the Fed's
ultra-easy policy stance has a new lease on life.
Fed Still On The T-Bond
August 24, 2009
Kohn's Jackson Hole remarks don't mean more long-term bond buys are
The Fed's Bond Boo-Boo
July 24, 2009
The FOMC knows its $300 billion bond buy was a mistake -- it won't be
Check the Exit
July 22, 2009
Bernanke's vision for ending the
Fed's hyper-accommodation is all tools and no timing.
A Run on the Fed?
July 10, 2009
The Fed is losing the short-term
financing for its long-term liabilities.
Steady -- And Easy -- As She Goes
June 25, 2009
The Fed's abandonment of its
deflation worries changes almost nothing.
Too Soon to Stray
June 23, 2009
Markets should be relieved tomorrow when the
Fed stays the course.
They Laughed When I Sat
Down to Monetize
June 4, 2009
The Fed is
less worried about deflation -- but it's not worried enough about
Thrown A Curve
June 1, 2009
A record 2-10 Treasury spread shouts
"inflation," but the Fed can't hear it.
Fed Says, Give Us Some Slack
May 6, 2009
Bernanke thinks the economy has
turned the corner -- all the worse for inflation risk.
The Fed, Blinded by the Obvious
April 30, 2009
Of course the economy has improved
slightly -- but the Fed remains bent on inflation.
April 6, 2009
The Fed sees the inflation risk in its huge balance sheet -- but there's
nothing it can do.
Taking It Up A Notch
March 27, 2009
TALF 2.0 makes the Fed's balance
sheet both bigger and stickier.
Ben Boldly Goes
March 19, 2009
It's official: the Fed is fighting deflation by monetizing debt.
Treasury Won't Bail Out
February 17, 2009
Their obscure partnership won't keep
the Fed from having to inflate our way out of crisis.
"Some Time" A Great Notion
December 17, 2008
A zero rate and a humongous Fed balance sheet -- good for now, but not
History-Making, But Irrelevant
December 15, 2008
Tomorrow's likely record low funds
rate has little to do with how the Fed now operates.
1% and So What?
October 29, 2008
The funds rate has been trading below
1% for weeks, and the Fed has moved beyond rate-targeting anyway.
Regime Change at the Fed
October 14, 2008
Interest on reserves could either
accelerate or prevent inflation -- it depends on how the Fed handles
this powerful new tool.
How Tough is Ben's Tough Love?
September 16, 2008
The Fed has eschewed bailouts. Can
the FOMC resist a pointless rate-cut today?
July 24, 2008
In a showdown between
the dovish Fed governors and the hawkish regional presidents, the
July 3, 2008
The ECB challenges the Fed to clean up its own inflationary mess.
Bonds Wish, Stocks Worry
June 26, 2008
Markets are wrong if they believe that yesterday's FOMC statement puts
the Fed on hold.
Hikes Are Coming, and Not
a Moment Too Soon
June 19, 2008
Despite the chatter, an improving
economy and rising inflation point to a higher funds rate.
This is the Turn
June 11, 2008
In a matter of days, Fed
expectations have shifted 180 degrees -- to the right direction.
The Bernanke Awakening
June 5, 2008
The Fed chief's dollar talk is not
just talk. It's a call to action.
No Pause Promise, But No
May 1, 2008
The FOMC was disturbingly vague -- but the
finger is off the rate-cut trigger.
April 29, 2008
Tomorrow the Fed will pause -- but an end to the easing cycle would be
Fed vs ECB -- the ECB Wins
April 23, 2008
The euro's run may be ending as the
Fed starts acting more like the ECB.
It Doesn't Look As Bad Now
As it Did Then
April 10, 2008
Don't read too much into minutes of an FOMC meeting held the day after
the end of the world.
Inflation: Not the Worst
Case, But Still a Case
March 26, 2008
The Fed isn't going to be as easy as it once seemed, but it's still
Wednesday, March 5, 2008
The Fed's statements about inflation
expectations are not anchored to reality.
"No Quandary Here"?
February 21, 2008
The Fed has a bogus rationale for sacrificing price stability on the
altar of easy money.
Fed Cred Dead?
January 22, 2008
Even as it saves the world, the Fed can't
quite get it right.
January 11, 2008
The more Bernanke gives, the more the
markets want -- and the more money gets dropped.
December 12, 2007
The Fed is trying to help, but its
clumsiness is undermining confidence rather than enhancing it.
"Act As Expected"
November 28, 2007
The Fed repeats it will only "act as needed," but it's still not likely
to disappoint expectations.
Fed Liquidity Runneth Over
November 7, 2007
A new conundrum: the Fed is injecting
record liquidity, yet the funds rate is trading below target.
Hawk on the Outside, Dove on the Inside
November 1, 2007
Yesterday's FOMC disappointed the
doves, but the Fed remains tilted toward ease.
From Line in the Sand, to
Sand in the Face
October 30, 2007
Bullied by gold, oil, the dollar and the
futures markets, what can the Fed do to be strong
Fed in the Crosshairs
October 5, 2007
The first rule of central banking is:
never admit you made a mistake. That means another rate cut at the
October FOMC meeting.
It's Not Just a
River in Egypt
September 28, 2007
For the Fed, it's "jobs, jobs, jobs" -- and inflation is a matter of deep
The Fed Gets the
September 19, 2007
The Fed caves in to panic, and inflation risk kicks into high gear.
Dearth of a Thousand Cuts
September 18, 2007
will cave to market pressure and cut the funds rate once, but a neutral
bias will disappoint the doves about future cuts.
August 17, 2007
The Fed cleverly addressed the needs of
beleaguered markets, without launching new helicopter drops of money on the
The Fed Gets it Right
August 8, 2007
Thankfully no pandering to panic-mongers,
but rates likely stuck on hold now until 2008.
June 29, 2007
The Fed needs more proof that inflation
has been tamed – and arbitrary core readings aren’t it.
Of Two Minds
April 12, 2007
Bernanke used to think low inflation was
consistent with steady growth -- now it seems he can't decide between them.
On Second Thought…
March 23, 2007
After Wednesday's knee-jerk reaction to
the FOMC statement, a clearer appraisal.
Fed Marking Time
October 26, 2006
The FOMC fiddles while inflation burns -- and bonds applaud.
The Frustrated Fed
September 28, 2006
Lenin's Tomb do Fed officials have to stand to signal their hawkish bias?
Surprise on the
August 9, 2006
The Fed dug itself deeper in inflation denial yesterday, which raises the
price the economy will have to pay tomorrow.
March to Folly
August 4, 2006
Today's job number seals the deal: the Fed is headed for a major error.
June 30, 2006
The FOMC wants it both ways on growth and inflation -- but its
ambivalence puts both at risk.
June 6, 2006
An inflation-aware Fed will do the right thing for the right reason -- but
still may get it wrong.
March 21, 2006
Bernanke plumbs the yield curve's mysteries, but
his economic outlook is clear -- and bad for bonds
Is Ben Bernanke a Phillips
March 1, 2006
Does the Fed chair mean it when he says that
maximum employment and price stability are compatible?
January 24, 2006
Greenspan's successors will have to live with a
legacy of inflationary risk.
December 20, 2005
As the new Fed chairman takes office, his
deepest beliefs will pull him in opposite policy directions.
Time for Change?
December 9, 2005
The Fed might be approaching neutrality, but
that doesn't mean it's done.
November 1, 2005
The risk in a new Bernanke Fed is overshooting
in the direction of tightness.
Cat Out of the Bag?
September 19, 2005
Gold's inflation warning is too obvious for even
the post-Katrina Fed to miss.
Katrina and the Fed
September 2, 2005
Expectations that the Gulf Coast disaster will
deter the Fed are all wet.
June 27, 2005
Oil prices put the Fed on notice: this is no
time to be flirting with a less vigilant stance.
Fed, Still Behind the Curve
June 16, 2005
This month's seemingly strong dollar masks
dangerous underlying weakness in Fed policy.
Department of Corrections
May 4, 2005
The FOMC corrected its statement yesterday --
but when will the Fed correct the bond market.
The Fed's Oil Slick
March 21, 2005
Record crude prices mean a monetary mistake
could be not just dumb, but disastrous.
Passing the Buck
November 22, 2004
There's one man in the world who can save the
falling dollar -- and he won't do it.
November 15, 2004
There's a lot of talk about the dollar now --
all of it dangerous, and none of it right.
October 26, 2004
It looks like the Fed may have found a new
reason to stay too easy for too long.
September 20, 2004
At these yields, the bond market needs the FOMC
to be a lot gloomier than it's likely to be.
August 9, 2004
Greenspan won't take a pass tomorrow -- but
that's where the certainty ends.
June 28, 2004
Gold tells the tale the Fed would rather be left
June 25, 2004
fight the numbers: trusting the Fed has been an expensive mistake.
June 16, 2004
Small improvements in reported inflation only
open the door for large policy error.
Surprises in Store
May 27, 2004
"Gradualism" means the Fed is not so gradually
falling behind the inflationary curve.
Clear and Present
April 29, 2004
Everyone seems to know the Fed is raising rates.
But does the Fed?
April 12, 2004
Even after March's terrific jobs report, the Fed
still just doesn't get it.
What’s He Thinking?
March 29, 2004
Alan Greenspan wants inflation. The problem is:
he's going to get more than he's bargaining for.
Good News, Bad News
January 29, 2004
The Fed takes a step in the direction of sanity
-- if only a small one.
Don’t Worry, Be Happy?
January 27, 2004
Is the Fed inevitably facing the constraints of reality?
Saddam's Not Enough
December 15, 2003
Geopolitical/military risk is one thing -- and
monetary risk is another.
Further Behind the Curve
December 8, 2003
The jobs report can only reinforce the Fed's increasing recklessness.
Betting on Sanity
November 21, 2003
Markets think that the Fed isn't going to be quite as reckless as its
See No Evil
November 14, 2003
If the Fed refuses to learn from inflationary history, are we doomed to
Desperately Seeking Inflation?
October 29, 2003
Markets will have to deal with the
possibility that Greenspan isn't just blind to inflation -- he actually
FOMC: Moment of Truth
October 27, 2003
Tomorrow's policy meeting could be pivotal in
determining whether inflation risk becomes inflation reality.
Disinflation: Public Face vs
October 20, 2003
Surely the Fed must at least privately acknowledge the evidence that
disinflation is over. Now -- will they act?
Gold at $380
September 10, 2003
The Fed's confused belief that its role is to
regulate the labor market is again putting monetary risk in play.
Is This What They Had In Mind?
August 18, 2003
The Fed has allowed long-submerged inflation
risks to resurface, but appears unlikely to allow the risk to become
August 11, 2003
Tomorrow's meeting should bring
early hints of a forthcoming policy change.
Bernanke to the Rescue?
July 23, 2003
Bernanke's homage to deflation-fighting will
provide only short-term comfort to battered bond bulls.
How Much Will These Free Options Cost?
June 25, 2003
Unworried about inflation, the Fed's trying to
gun the economy.
How Much Room?
June 11, 2003
How much longer will the Fed be able to court
inflation risk as it fights a non-existent deflation?
May 7, 2003
A muddled Fed contemplates applying monetary
solutions to non-monetary problems.
Portrait of the Greenspan Era
May 6, 2003
When it comes to monetary policy, a picture
may be worth 100,000 of Alan Greenspan's words.
The Too-Big Easy?
January 31, 2003
There's no inflationary impulse in the Fed's
accommodative stance -- yet. But it's time to start watching.
Gold's Wild Ride
December 20, 2002
It's for sure now -- both gold and Greenspan are
telling us unambiguously that the Fed "gets it" on deflation.
Better Late Than Never
November 8, 2002
Fed minutes show policymakers grappling with the
specter of deflation risk.
Monetary Hall of Mirrors
October 11, 2002
If monetary policy is the easiest it's been in
40 years, why isn't the Fed adding liquidity?
The Reality Trade
August 19, 2002
The FOMC's bias shift offers little support to a market over-extended on
August 12, 2002
The same Wall Street economists who expected the
Fed to tighten last spring are going to be disappointed all over again --
when the Fed doesn’t ease.
Greenspan Still On Hold
July 16, 2002
Greenspan may be "upbeat," but that doesn't mean
rates are going up any time soon.
Not So Fast
June 10, 2002
For the Fed, reversing last year's rate cuts
looks likely to stay on hold.
Where's the Risk?
April 23, 2002
For all the chatter about expansion, how come
the markets won't bet on it?
The Fever Breaks
March 26, 2002
Today may have been an inflection point -- the
market saw the media celebration over consumer confidence, but listened to
March 18, 2002
Wall Street may have already made up its mind,
but Greenspan's careful signals mean a shift into neutral tomorrow is no
better than a 50/50 proposition.
March 15, 2002
A recovery may be just beginning. Now let's
hope the Fed doesn't fight inflation that's not there -- again!
February 26, 2002
He'll be even more circumspect than usual
tomorrow -- and that will be a disappointment for the rate-hike bears.
January 28, 2002
The Fed is done "easing," but the deflationary
shortfall of dollars remains unaddressed.
Greenspan's Message, and Why It Clocked Stocks
January 14, 2002
In both text and subtext, Greenspan's message
was bad news for equities.
The 1990s Boom-and-Bust:
Learning the Wrong Lessons
December 31, 2001
David Gitlitz and
How can we hope to restore the prosperity of
the 1990s when no one understands why it ended?
One Wild Ride
December 10, 2001
The pounding of the bond market reflects
expectations that the Fed will soon switch into a tightening mode. It's more
likely that even after tomorrow’s funds rate cut, the Fed won't be done.
Show Me The Money
November 19, 2001
Gold is back down to pre-September 11 levels,
an indication of the risks to a market pricing for V-shaped recovery.
BoJ on the Potomac?
November 2, 2001
It's not premature to ask: Is the Fed
following in the disastrous footsteps of the Bank of Japan?
October 12, 2001
The Fed is signaling that
it's back to a rigid rate-targeting policy -- and they're even willing to
drain liquidity to do it.
October 5, 2001
Just a relief rally? Maybe, but there are signs that Alan Greenspan may
finally have gotten it right. And that could make a difference.
Alan Greenspan's Perfect Storm
September 19, 2001
Yesterday Greenspan's rate-targeting mechanism
totally ruptured -- and it took the bond market down with it.
The Cut of Five Thousand Deaths
September 18, 2001
Greenspan's still playing follow-the-market
when the market desperately needs a leader.
A Significant Fed Move
September 17, 2001
The Fed is going to meet emergency
liquidity needs, whatever it takes. But we'll have to wait till the next
FOMC meeting to see if they intend to make a permanent difference.
Financial Fallout: Here Comes
the Rate Cut
September 11, 2001
This morning's terrorist attack will surely
trigger new liquidity from the Fed.
Reckoning With Reality
September 10, 2001
The reality of a collapsing economy
is catching up to the Fed. But is there anything the Fed can do to catch up
to the reality of the collapsing economy?
Looking Under the Dust
September 5, 2001
This week's bond market massacre has
been ugly -- but Alan Greenspan isn't through cutting rates!