Federal Reserve

Federal Reserve

How Has a Decade of Extreme Monetary Policy Changed the Banking System?

To stem the financial crisis, the Federal Reserve purchased massive volumes of Treasury and government agency MBS, ballooning the Fed’s balance sheet to $4.5 trillion. The Fed kept nominal interest rates close to zero. Even now Fed policy rates are negative in real terms. Banks have accumulated $2.34 trillion in reserves balances that earn interest from the Fed while adapting to a myriad of new post-crisis regulations. How has a decade of exceptional Fed monetary stimulus and the regulatory efflorescence affected the US banking system?


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Posted: October 20th, 2017 | Permalink

An Orgy of Blood

“The current social contract is mired in the quicksand of global finance. It is being kept alive by the corpulent balance sheets of central banks, who do their government’s bidding so that the politicians do not have to put unpleasant choices in front of their electorates. This cowardly behavior gives rise to slogans and sloganeers, who provide familiar but false checklists of remedies. ‘Take bank control’…’America First’…’One Belt, One Road’…’Ein Volk, ein Reich, ein Fuhrer’…’One Man - One Kill’. Central banks are currently furnishing the excess credit that, in the past, has been followed by an orgy of blood.”


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Posted: October 17th, 2017 | Permalink

Will the Fed Raise Rates this Year?

Posted: October 16th, 2017 | Permalink

Demographic Transition and Low U.S. Interest Rates

“A drop in the population growth rate can induce two opposing effects on real interest rates,” wrote analysts at the Federal Reserve of San Francisco. “On the one hand, GDP growth is influenced by population growth. Lower population growth slows down productivity and potential GDP growth, pushing interest rates down. On the other hand, lower population growth eventually drives up the share of older households (retirees) in the population. Because retirees consume out of their savings, the increasing share of retirees leads to an increase in consumption…” 


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Posted: September 27th, 2017 | Permalink

Federal Reserve Will Begin to Unwind Its Balance Sheet


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Posted: September 21st, 2017 | Permalink

The Fed Cheat Sheet


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Posted: September 20th, 2017 | Permalink