Bernanke gave a speech this morning in Jackson Hole, Wyoming: “Reflections on a Year of Crisis”. Here are some interesting excerpts with my commentary: TOO BIG TO FAIL: The Federal Reserve has consistently maintained the view that the disorderly failure…
We mustn’t assume that all problems are solvable in the short period. There are problems that we cannot solve or which trying to solve them quickly may do more harm than good. – Friedrich von Hayek on “Meet The Press”,…
I think everyone pretty much knew what the Fed would do today. They would keep interest rates at 0%-0.25% and say they were likely to stay there for an extended period of time. They would keep their agency and treasury…
In another incredible statement by a so called expert we get this: Investment Conclusion: There are plenty of things to worry about. Fed policy is not one of them. – Jeff Miller, A Dash Of Insight, July 16 Citing McTeer,…
But I see inflation as the greater future challenge. If political pressures prevent central banks from reining in their inflated balance sheets in a timely manner, statistical analysis suggests the emergence of inflation by 2012; earlier if markets anticipate a…
In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability…
No change in policy from the Fed today on interest rates or securities purchases and the statement was mostly a photocopy of the March one as well. The only change was some comments that the economy has improved slightly since…
Inflation expectations might also shift if the markets lose confidence in the state of the public finances. Washington is set to produce a deficit this year of $1,800bn (£1,237bn, €1,325bn). The cost of bailing out Wall Street runs to several…
The dollar continues to tank and commodities continue to rally in the wake of yesteday’s Fed announcement: The euro is up another 2 cents versus the dollar to $1.37 – after rallying 4 cents yesterday after the Fed announcement. Oil…
To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total…