Relevant and even prescient commentary on news, politics and the economy.

Inflation is decelerating substantially towards the Fed target ADDENDUM: the huge impact of shelter

Measured by actual rather than fictitious prices, inflation is decelerating substantially towards the Fed target ADDENDUM: the huge impact of shelter  – by New Deal democrat For the last year, consumer prices have mainly been about two things: (1) the huge rise, and then fall, in gas prices; and (2) the phantom menace of owner’s […]

Interest rates, the yield curve, and the Fed chasing a Phantom (lagging) Menace

Interest rates, the yield curve, and the Fed chasing a Phantom (lagging) Menace There’s a lot going on with interest rates in the past few days. Mortgage rates have increased above 7%: This is the highest rate since 2008. Needless to say, if it lasts for any period of time it will further damage the […]

Beyond the horse race to lead the FED

Sarah Binder is a professor of political science at George Washington University and a senior fellow at the Brookings Institution, offers some thoughts on the FED and its changing role ( re-posted with authors permission, for the complete post go to original): Beyond the horse race to lead the FED …As the horse race for […]

The Fed, Primary Dealers, and the Ineffectiveness of Monetary Policy

by Mike Kimel The Fed, Primary Dealers, and the Ineffectiveness of Monetary Policy The Federal Reserve’s primary tool for monetary policy is buying or selling securities, in particularly US notes, bills and bonds. But… it doesn’t buy and sell bonds to you and me. Instead, it deals with primary dealers – the complete list is […]

ECB policy is tightening – has been for some time

Update: Nouriel Roubini front pages this post on Euromonitor here. The ECB dove in and hiked its policy rate by 25 basis points to 1.25%. I had the pleasure of listening to Wolfgang Munchau on Thursday, and he reiterated what I reluctantly understood: the ECB’s strict inflation target is ridiculously simple for such a complex […]

Comparing the Fed, the ECB, and the BoE before policies diverge

The coming week is G4 central bank week. The Federal Reserve Bank (Fed) announces its policy decision on November 3; the European Central Bank (ECB) and the Bank of England (BoE) will make policy announcements on November 4; and the Bank of Japan pushed forward its November 15-16 meeting to be held now on November […]

The Fed Goes to Five

The FOMC (the interest rate-setting committee at the Fed) raised the Federal Funds rate to 5.0% today. Here’s the important bit of the accompanying statement: Economic growth has been quite strong so far this year. The Committee sees growth as likely to moderate to a more sustainable pace, partly reflecting a gradual cooling of the […]

Michael Darda’s Fiscal Advice for the FED

There is wee bit in Michael Darda’s latest that I might agree with – but given the following, I have two questions for him and the rest of NRO Financial: If Congress doesn’t act to extend the 2003 tax cuts, tax rates on capital will rise, which would depress after-tax rates of return to capital […]