money markets

The Starring Role In The Powell Pause Isn’t R-star

By |2018-12-04T17:36:40+00:00December 4th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

R-star is a fiction which like term premiums for interest rate decomposition allows Economists to skate past reality and onto their econometric blackboards. If there was a neutral rate, which R-star (or R*) proposes to be, why would there be only one and what good would knowing its level today do? In a dynamic world, [...]

Monetary Hierarchy, Independence, And Shaming Greenspan Yet Again

By |2018-09-21T17:30:01+00:00September 21st, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

Fundamental, Not Technical

By |2018-08-27T12:07:50+00:00August 27th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

Very Strong(ly Worried)

By |2018-07-05T18:47:25+00:00July 5th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

Talk About Binary; No In Between, Either Boom or Renewed Deflation

By |2018-07-05T17:22:38+00:00July 5th, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]

EFF Watch, Or Is It IOER Watch?

By |2018-06-22T16:09:37+00:00June 22nd, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

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 [...]