One criticism of the Fed’s quantitative easing program is that it’s supposedly only helping wealthier Americans. The central bank’s bond buying pushes up the prices of financial assets, which rich folks happen to own a lot of. Now, this criticism … read more
One has to pity Ben Bernanke during the remainder of his tenure as head of the Federal Reserve, which is due to terminate in January 2014. For his bold experimentation with unorthodox monetary policy has not worked out quite the … read more
In nominal terms, the Dow Jones industrial average is up about 30% since January of 2000. Adjusted for inflation, however, it’s more or less flat. To me, that back-of-the-envelope calculation hints that the Fed’s quantitative easing has not created some … read more
Republicans should pay close attention to what’s happening in Japan, where the Bank of Japan’s new bond-buying program is already bearing fruit. As the Financial Times reports, ”Japan’s economy grew at the fastest pace among Group of Seven countries last quarter, … read more
Tracing out the break-up-the-banks logic leads to some uncomfortable places. Alex Pollock’s new American Banker piece shows how the very reasons advocated for breaking up the banks (“they are too big, too leveraged, create too much systemic risk, have too … read more
The Bernanke Fed has made two massive mistakes. First, it “passively tightened” between April 2008 and October 2008 — via hawkish FOMC statements and leaving rates unchanged — as the economy deteriorated. Second, it fell asleep once the worst of the … read more
The economic news out today shows retail sales expanded, in the words of JPMorgan, “solidly” in April, with figures for both February and March revised higher. And last week, the four-week average of jobless claims fell 6,000 to 33,700, the lowest … read more
The San Francisco Fed: The Federal Reserve was created 100 years ago in response to the harsh recession associated with the Panic of 1907. Comparing that recession with the Great Recession of 2007–09 suggests the Fed can mitigate downturns to … read more
It’s been a busy three decades for the US financial system: 1) Banks with exposure to Latin American debt got into big trouble in the 1980s, 2) the 1987 stock market crash, 3) the S&L crisis and bailout, 4) the Russian … read more
Sure, Fed policymakers say the right words: “Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.” But as the above chart shows, they are failing dreadfully in walking the walk. Inflation way below target, … read more
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