Tag Archives: Fed
currency wars

Book Review: Currency Wars

In his 2011 book Currency Wars: The Making of the Next Global Crisis, James Rickards explains that we are in the third reincarnation of currency wars. He highlights the fact that the Fed is currently undertaking the biggest financial gamble in history. James Rickards, an investment banker on Wall Street for over 35 years, has turned […]

Continue Reading
unemployment

How much slack does the U.S. labor market really have?

U.S. labor market slack, the unused part of economic production capacity, is an important economic indicator used by the Federal Reserve to determine forward guidance. The question is how much slack the FOMC thinks there is. When Fed Chair Janet Yellen told Congress that she would base her Federal Reserve decisions on a broader range […]

Continue Reading
Janet Yellen (credit: Economic Policy Journal)

Fed debates changing forward guidance

The quickly falling US unemployment rate has caused the Federal Reserve to reevaluate how it communicates when it will raise interest rates. Recently released minutes of the Federal Reserve’s last policy meeting showed that committee members disagree about the best way to communicate future policy as US unemployment has fallen close to their threshold for […]

Continue Reading
Janet Yellen (AP Photo/Mark Lennihan)

Yellen’s first statements chart clear path for Federal Reserve

The new Fed Chairwoman made clear to Congress that her Fed will focus on improving the labor market and being straightforward in its messaging. In her first major appearance since becoming the new Chairwoman of the Federal Reserve, Janet Yellen spent last Tuesday answering questions from the House Financial Services Committee. Although she had made abundantly […]

Continue Reading

Why Stan Fischer’s next job matters for global financial stability

The US Federal Reserve is getting a new face: Stan Fischer will likely become the body’s new vice chairman. All eyes are on where he stands on the Fed’s increasingly regulatory role. Last month, US President Obama nominated Stan Fischer for the vice chairman position at one of the world’s most influential financial regulatory policy bodies: […]

Continue Reading
Rafael Matsunaga via Wikipedia

US taper puts pressure on emerging markets

The Federal Reserve’s decision in January to continue reducing the pace of asset purchases has put emerging markets in a bind. At the end of January, the Federal Reserve decided to further reduce the pace of its monthly asset purchases by another $10 billion, down to $65 billion. This followed its December decision to initiate […]

Continue Reading
political risk storm

2014: a balance between global optimism and latent risks

The World economy is on the mend, but recovery will not happen everywhere at the same pace. Here are some of the risks that will play a large role in determining the success of economic recovery in 2014. Advanced economies, such as the UK and the US already stand out from the crowd. There, the […]

Continue Reading
Ben Bernanke television

Central banks rely on forward guidance

As interest rates remain low among developed economies, shaping expectations through communication is proving to be an effective monetary tool. Communicating the taper At its last monetary policy meeting, the U.S. Federal Reserve announced its intent to reduce the size of its bond purchases beginning in January. Known as “tapering,” this long-awaited move cut future […]

Continue Reading
Murray Ryan

U.S. Congress has a budget deal, but more uncertainty lies ahead

Despite the successful Ryan-Murray budgetary agreement, another U.S. Debt Ceiling Debate Looms on the Horizon. A compromise brokered by Republican Representative Paul Ryan and Democratic Senator Patty Murray is poised to become law, setting federal spending for 2014 and 2015. Not only did this deal avoid eleventh-hour theatrics, but it also is more substantial than […]

Continue Reading
Fed Holds Open Meeting On Rules For Capital Requreiments

Federal Reserve mulls taper, possible changes in guidance

A strong December U.S. jobs report has fueled speculation on the possibility of a taper of asset purchases in December or January. However, job numbers are not clear-cut for a change in Fed policy. The latest U.S. jobs report showed that the unemployment rate fell from 7.3 to 7.0 percent, beating expectations. This brings the […]

Continue Reading