Today, for the 2nd consecutive meeting, the Federal Reserve kept the federal funds rate at 2%. The statement seems to indicate the risks are balanced between growth and inflation and that, therefore, the Fed is on pause for the foreseeable…
Every weekend I write a client note in which I attempt to summarize the week’s action and highlight significant events. As I was writing it last night I was struggling to make sense of the huge selloff we saw last…
Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased. – Fed Statement, June 25 After 7 consecutive cuts in the Fed Funds rate from 5.25% down…
Less than a month after announcing across the board price increases to combat rising energy and raw materials costs (May 28 Press Release), Dow Chemical (DOW) is at it again announcing additional across the board price increases of as much…
The people who created this country built a moral structure around money. The Puritan legacy inhibited luxury and self-indulgence. Benjamin Franklin spread a practical gospel that emphasized hard work, temperance and frugality. Millions of parents, preachers, newspaper editors and teachers…
Moreover, the latest round of increases in energy prices has added to the upside risks to inflation and inflation expectations. The Federal Open Market Committee will strongly resist an erosion of longer-term inflation expectations, as an unanchoring of those expectations…
[Chairman Bernanke] went today where no other Fed chairman has gone in my 20 years of doing this. He dove into the deep end of the dollar policy pool. – David Gilmore (subscription required), Foreign Exchange Analytics As we’ve discussed before,…
In collaboration with our colleagues at the Treasury, we continue to carefully monitor developments in foreign exchange markets. The challenges that our economy has faced over the past year or so have generated some downward pressures on the foreign exchange…
Whenever the Fed says or does something that is subsequently misinterpreted, they have a few back door methods to correct the error. Two in particular were used fairly regularly. Call it the Fed edit/correction methodology. When John Berry was at…
Do we have the wit and the wisdom to restore an environment of price stability without impairing economic stability? Should we fail, I fear the distortions and uncertainty generated by inflation itself will greatly extend and exaggerate the sense of…