Tag Archives: Federal Reserve

Authored by Kevin Muir via The Macro Tourist blog, After many months of fighting all the naysayers predicting the next big stock market crash, I am finally succumbing to the seductive story of the dark side, and getting negative on equities. I am often early, so maybe this means the rally is about to accelerate to the upside. I am willing to take that chance. It would be just like me to pound the table on the long side,...

This is an extract and summary from “New Gold Pool at the BIS Basle, Switzerland: Part 1” which was first published on the BullionStar.com website in mid-May. Part 2 of the series titled “New Gold Pool at the BIS Basle: Part 2 – Pool vs Gold for Oil” is also posted now on the BullionStar.com website. “In the Governor’s absence I attended the meeting in Zijlstra’s room in the BIS on the afternoon of Monday,...

The following article by David Haggith was first published on The Great Recession Blog: We just saw a major rift open in the US stock market that we haven’t seen since the dot-com bust in 1999. While the Dow rose by almost half a percent to a new all-time high, the NASDAQ, because it is heavier tech stocks, plunged almost 2%. Tech stocks nosedived while others rose to create new highs. Is this a one-off, or has a...

In the FT, Sam Fleming and Demetri Sevastopulo report that the White House considers Marvin Goodfriend for the Federal Reserve’s Board of Governors. He has criticised the Fed’s crisis-era balance sheet expansion, saying the central bank should generally not purchase mortgage-backed securities, and has advocated the use of monetary policy rules to guide policy, as has Mr Quarles. … At the same time, however, Mr Goodfriend has been willing to contemplate the use of deeply negative rates to...

Whether or not San Francisco Fed President John Williams is right about US inflation and employment being about as close to the central bank’s targets as investors have seen – as he told CNBC two days ago – is irrelevant: The central bank is going to raise interest rates two more times this year no matter what happens to consumer prices, says Credit Suisse Chief Investment Officer for Switzerland Burkhard Varnholt....

On this holiday weekend known here in the U.S. as Memorial Day, I would like to make a slight turn in the narrative that many give little to no attention too, yet, is one of the most important underlying principles or fundamentals which helped shape, lift, mold, sustain, and create one of the world’s greatest economic powerhouses bar none. That “turn” is in remembering: The liberty to create, and own, one’s own...

 As I so often write, we still talk about 2008 because we aren’t yet done with 2008. It doesn’t seem possible to be stuck in a time warp of such immense proportions, but such are the mistakes of the last decade carrying with them just these kinds of enormous costs. It has been this way from the beginning, even before the beginning as if that was possible. The Great Financial Crisis has no official start date, but we...

I don’t think Milton Friedman would have made much of chess player. For all I know he might have been a grand master or something close to that rank, but as much as his work is admirable it invites too the whole range of opposite emotion. He was the champion libertarian of the free market who rescued economics from the ravages of New Deal socialism, but in doing so he simply created the avenue for where Economics of...

The Economist reported about the history of central banks and their independence. One snippet: Typically, Richard Nixon took the bullying furthest, leaking a false story that Arthur Burns, Martin’s successor, was demanding a 50% pay rise. Attacked by the press, Burns retreated from his desire to raise interest rates.

Summary: Correlation between the change in the US-German two-year differential and euro remains robust. The German two-year yield has jumped in recent weeks but looks poised to slip back lower. US two-year yield has eased but is knocking on 1.30%, an important level. There is one variable that explains the euro movement better than any other single variable we have found. The US-Germany two-year interest...