In June 2003, while discussing the vote that would take the federal funds rate to its then-lowest point, 1%, Alan Greenspan committed what may have been the greatest monetary sin of modern times. The focus for much of the discussion was Japan, that country’s central bank pioneering at that early date all the things the Fed and other majors would [...]
On June 13, the day the eurodollar futures curve inverted, Federal Reserve Chairman Jerome Powell was at his regularly scheduled press conference following the regularly scheduled FOMC meeting. Nobody asked him about eurodollar futures, of course, because why bring that up? The press did inquire about IOER, though. The Fed had decided to make a “technical adjustment” in its policy [...]
Inflation hysteria and the boom hysteria may both seem like they are one and the same thing. They are related, sure, and they represent similar objects. However, there are subtle differences. The mania over inflation, for example, has subsided while the one about the economy reaches its own feverish pitch. In early June, Newt Gingrich appeared on ABCNews’ The View [...]
CNY has held up over the last few days after Chinese officials intervened. Central bank actions like these tend to work if only over the very shortest timeframes. The tentative calm there, however, hasn’t extended universally. Copper, for one, has fallen right out of its Reflation #3 range. Selling off solidly for almost a month now, today it was pounded [...]
How bereft of ideas might they have to be to fall back on IOER? It’s scandalous, really. But the Federal Reserve in terms of intellectual property belongs on the TV program Hoarders. They never throw anything away, so attached do they become to whatever ineffective idea implemented at any time. Practical experience is in their practice impractical evidence. It’s all [...]
I don’t know if I should make this a regular feature or not, but IOER is the one monetary policy factor that maybe is easiest enough to understand and therefore the quickest route for the public to get to they really don’t know what they are doing. Federal funds aren’t some obscure way off policy goal, it’s the very lever [...]
That didn’t take long. The Fed’s IOER scheme lasted all of three trading session. That it was broken yesterday of all recent days isn’t surprising, at least when you realize the full range of things going on yesterday. First, a review: The issue this week, perhaps, is again EFF only this time the effective rate is pushing a little too [...]
Last week, it was overseas central bankers who stole the show. Many of them particularly in EM locations have had a really rough go of late, and a few in particular wanted the world to pay attention to dollars. Not any dollars, of course, as that would be far too easy. Rather, offshore “dollar” markets have found a few voices. [...]
In June 2008, ICAP actually launched a US-based alternative to LIBOR. It ended up as nothing more than one very minor footnote lost in a sea of more pressing problems and events. Still, that they even tried is somewhat significant and relevant to today. Before the whole cheating scandal came out, there were questions surrounding just what LIBOR was indicating. [...]
On March 24, 2009, then US President Barack Obama gave a prime time televised press conference whose subject was quite obviously the economy and markets. The US and global economy was at that moment trying to work through the worst conditions since the 1930’s and nobody really had any idea what that would mean. As President, Obama’s main task was [...]
Stay In Touch