Found 503 article(s) in category 'Monetary Policy'

50 percent chance of a US recession by 2020

50 percent chance of a US recession by 2020. Lawrence Summers, November 15, 2018, Video, “Former Treasury Secretary Larry Summers has put the chances of a U.S. recession at 50 percent within the next two years. The economist told CNBC’s Joumanna Bercetche on Thursday that a slowdown in growth was a “near certainty” before adding “the recession risk is nearly 50 percent over the next two years, maybe slightly less.Link

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Fed bashing is a fool’s game

Fed bashing is a fool’s game. Lawrence Summers, November 5, 2018, Opinion, “President Donald Trump has publicly and harshly rebuked Jay Powell, the chairman of the US Federal Reserve, for what he regards as misguided increases in interest rates that threaten continued economic expansion. As with much of what Mr Trump says and does, his way of doing business is counterproductive, irrespective of whatever merit his underlying position may have.Link

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Is Retail Dying? Plus, How Are Companies Spending their Tax Cuts?

Is Retail Dying? Plus, How Are Companies Spending their Tax Cuts? Youngme Moon, Mihir Desai, Felix Oberholzer-Gee, October 24, 2018, Audio, “Youngme Moon, Mihir Desai, and Felix Oberholzer-Gee discuss whether the “retailpocalypse” is real, try to figure out how companies are spending their Trump tax cuts, debate whether share buybacks are a good thing or a bad thing, and offer their picks for the week.Link

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Fed Rate Hikes Will Kill Economic Growth, Market Rally

Fed Rate Hikes Will Kill Economic Growth, Market Rally. Martin Feldstein, , Video, “Harvard economist Martin Feldstein predicts that the Federal Reserve’s game plan to continue hiking interest rates will eventually choke economic growth and kill the seemingly endless bull market. “What worries me is not what’s happening now but what will happen as long-term interest rates rise,” he told Fox Business Network’s Maria Bartiromo.Link

 

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The Excess Sensitivity of Long-Term Rates: A Tale of Two Frequencies

The Excess Sensitivity of Long-Term Rates: A Tale of Two Frequencies. Samuel Hanson, October 15, 2018, Paper, “Long-term nominal interest rates are known to be highly sensitive to high-frequency (daily or monthly) movements in short-term rates. We find that, since 2000, this high-frequency sensitivity has grown even stronger in U.S. data. By contrast, the association between low-frequency changes (at 6- or 12-month horizons) in short- and long-term rates, which was also strong before 2000, has weakened substantially. We show that this puzzling post-2000 combination of high-frequency “excess sensitivity” and low-frequency “decoupling” of short- and long-term rates arises because increases in short rates temporarily raise the term premium on long-term bonds, leading long rates to temporarily overreact to changes in short rates.Link

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Fed needs to be mindful of lags between monetary policy and real economy

Fed needs to be mindful of lags between monetary policy and real economy. Lawrence Summers, October 5, 2018, Video, “Lawrence Summers, former Treasury secretary under President Bill Clinton and Harvard University president emeritus, joins ‘Squawk on the Street’ to discuss where the Fed’s mindset is on interest rates, inflationary pressures and the biggest economic risks.Link

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Trump’s Currency Confusion Continues

Trump’s Currency Confusion Continues. Jeffrey Frankel, September 20, 2018, Opinion, “Ever since the 2016 US presidential campaign, Donald Trump has falsely accused the Chinese of keeping the renminbi artificially weak. But the fact is that Trump’s own economic policies are driving up the value of dollar – an outcome that would have been foreseen by anyone with a basic understanding of economics.Link

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How Close Are We To Another Financial Collapse?

How Close Are We To Another Financial Collapse? Nancy Koehn, September 19, 2018, Audio, “This month marks the 10 year anniversary of our financial system buckling under the weight of big lending. The crash set off the worst economic crisis since the Great Depression, with millions of Americans losing their homes, jobs and savings. While the debate is still going on as to whether policymakers did enough to prevent this meltdown from being even worse, are our policy makers doing enough right now to keep another crisis from happening?Link

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