Posts filed under “Federal Reserve”

What Happens if the FOMC Gets Too Hawkish?

fed hawk

Source: Deutsche Bank Securities

 

Torsten Slok, chief international economist for Deutsche Bank AG, warns about the hawks on the Federal Open Market Committee getting too, well, hawkish.

The flowchart above shows the different transmission mechanisms of monetary policy. Slok uses it to highlight the widening spread between investment-grade and high-yield junk bonds.

If and when investors decide that the Fed’s extraordinary accommodation is ending, a bond selloff could occur. Such a sell-off might affect consumer spending and corporate capital expenditure. According to Slok, if the selloff is large enough in various fixed-income markets, it might even cause a recession.

The FOMC announcement comes today at 2:00 p.m. (Washington time).

continues here

Category: Digital Media, Federal Reserve

The ABCs of ECB’s QE

Source: Bespoke Investment Group     The European Central Bank announced its latest — and belated — program of quantitative easing last week. The ECB made fresh commitments to buy a series of asset-backed securities (ABS), various bonds and expanded its previously announced Long-Term Refinancing Operations (LTROs). The ECB’s brand of quantitative easing is an…Read More

Category: Bailouts, Digital Media, Federal Reserve

Seeds of U.S. Inflation Are Sprouting . . .

The Seeds of U.S. Inflation Have Sprouted and Could Be in Full Flower in 2016 Paul Kasriel September 8, 2014   I subscribe to the tenet espoused by the late Professor Milton Friedman that inflation is a monetary phenomenon. When I speak of inflation, I include not only the behavior of prices of goods and…Read More

Category: Economy, Federal Reserve, Inflation, Think Tank

The scarcity value of Treasury collateral

Category: Federal Reserve, Think Tank

Category: Federal Reserve, Think Tank

When and how should the Fed exit?

Category: Bailouts, Federal Reserve, Think Tank

Banks, Shadow Banking, and Fragility

Category: Credit, Federal Reserve, Think Tank

Category: Federal Reserve, Think Tank

Labor Market Dynamics and Monetary Policy Chair Janet L. Yellen FRBKC Economic Symposium Jackson Hole, Wyoming August 22, 2014     In the five years since the end of the Great Recession, the economy has made considerable progress in recovering from the largest and most sustained loss of employment in the United States since the…Read More

Category: Employment, Federal Reserve, Think Tank, Wages & Income

Economic policy, with and without forecasts

Category: Federal Reserve, Think Tank