On Wednesday, October 8, 2008, the FOMC voted for an emergency 50 bps cut in the federal funds rate, bringing it down to 1.50%. The day prior, the Fed announced that it would be buying short-term debt from businesses after suggesting the day before that it would fund up to $300 billion for “bad” assets. The Friday before that, Congress [...]
In January 2011, FRBNY began surveying primary dealers in order to try to gain a better understanding of how normalizing policy after two large (in their terms) programs of quantitative easing might affect money and bond markets. The banks were asked a series of questions, an array that has evolved over time, mostly about expectations for the future track of [...]
It’s amazing what will be ignored or forgotten in order to try to explain the state of the world when it strays so far beyond bounded conception. Commentary views the state of economic world as wholly separate dots, disparate systems only tangentially connected through nebulous trade terms and hard currencies. The world was once that way, though perhaps even then [...]
The simple narrative about QE is drawn from what is believed a simple process. The central bank buys bonds and by doing so it is simply assumed to be an “extra” bid on bond prices; therefore interest rates fall in whatever issue is being targeted by QE. Even in the US, QE has had trouble with that simple relationship. Instead [...]
Yesterday I looked at funding markets and currency proxies for detecting the end to the “dollar” pause that began on March 18. Broader credit markets agree with that assessment so far, as nominal yields and the UST curve shape have started, at least, to be redrawn back into the tightening format. Nominal yields and inflation breakevens turned right at May [...]
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