Yesterday, the Federal Open Market Committee announced a new program of easing that entails buying US Treasury debt. The FOMC stated that, “…the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.”
The New York Federal Reserve detailed the purchases as … …READ MORE
Tag Archives: Ben Bernanke
Fed Decides Then Justifies
Posted in Front Page Also tagged congress, currency war, Federal Reserve, Washington Post Leave a comment
Everybody on the QE2 Boat
The big story out last night was a Far East combo of central bank action and inaction. Both were a surprise. The action came from the Bank of Japan in their quest to stem the rise of their currency and to stimulate their economy. The BoJ started a program of quantitative easing that will see their balance sheet rise by $60 bln as they buy government bonds. They also said they would cut their benchmark rate from 0.1% to 0-0.1%.
The inaction came from the Reserve Bank of Australia, which kept their benchmark interest rate steady at 4.5% for the … …READ MORE
Posted in Front Page Also tagged Bank of Japan, central banks, Federal Reserve, policy, Politics, Reserve Bank of Australia Leave a comment
Fed Talks, But Will They Listen?
Today is Fed appreciation day with three speakers including the big guy, Ben Bernanke, are having a go at explaining their outlook for monetary policy. To be honest, I’m more interested in what Hoenig has to say especially since he continues to dissent. During the Greenspan era, the lack of dissent was detrimental to the policy making by the central bank. The recent interview by former Fed chairman Alan Greenspan is instructive when you only think with one mind: Referring to the housing bubble, “Everybody missed it,” he said, “academia, the Federal Reserve, all regulators.”
Given the success of Michael … …READ MORE
Financial Regulatory Reform:
Interesting speech by Federal Reserve chairman Ben Bernanke on Saturday before the Independent Community Bankers of America. “As the crisis has shown, one of the greatest threats to the diversity and efficiency of our financial system is the pernicious problem of financial institutions that are deemed “too big to fail.” Clearly, this and other comments regarding the Fed’s role in regulatory oversight were timed perfectly to coincide with the commencement of debate in the Senate on FRR. In case you think this is going to be easier than the health care bill, there are already roughly 400 amendments that have … …READ MORE
Posted in Front Page Also tagged congress, financial regulatory reform, Sen. Corker, Sen. Shelby Leave a comment
Ron Paul Day in the House
As part of the ongoing reconfiguring and reregulating of the American financial system, the House Financial Services Committee today will take up an amendment that seeks to audit Federal Reserve monetary policy. As so many things are backward in Congress, the vote today is actually a vote on a proposal to retain a ban on audits of Fed interest rate decisions. If it is voted down, then the Ron Paul bill to audit monetary policy could see the light of day.
The Paul bill has 300 cosponsors and clearly has struck a nerve in Congress. I’d go back to the … …READ MORE
Currencies and Exit Strategies
Here’s a quick back of the envelope list of countries and whether the currency’s strength will be a problem to engage in reducing monetary stimulus.
1. Australia: no problem
2. New Zealand: no problem
3. Canada: a problem
4. Brazil: a problem
5. China: no problem
6. UK: no problem
7. EZ: no problem
8. US: no problem……but no exit.
Brazil and Canada are clearly the poster children for currency strength duress as both those nations made it clear they are not happy with the situation yesterday. After the government denied on Friday then announced on Monday a tax on … …READ MORE
