Category: Monetary Policy

FOMC Communication: From Bad to Worse

In my previous post, I criticized the FOMC’s recent changes in the name of transparency, and hoped that the new moves anticipated last week would partially erase one of them. Specifically, I had hoped that the anticipated addition of the Fed Funds targets of individual FOMC members—which I thought was a bad idea—would at least […]

Through the FOMC’s Looking Glass: An Orgy of Transparency

Back in the day, when I was a member of the FOMC (1991-2004) I occasionally had an opportunity to push back against a push for greater transparency surrounding monetary policy. I was usually in the minority in thinking that transparency can be taken too far—that the reduction in flexibility for policymakers and the one-way bet […]

FOMC Transparency–Translucence Would Be Better

Transparency is a current FOMC cause But it reminds me too much of sausages and laws I think translucence, like my shower door, Is a good compromise It lets in the light, but keeps out the flies. Back in the day, I tended to drag my feet on new measures of transparency since I thought […]

Where is Europe’s Bazooka?

Treasury Secretary Paulson wanted Congress to give him a bazooka big enough that he might not have to use it. It turned out that he did have to use his, effectively as it turned out, and now it’s Europe turn to think big. They need a really big bazooka, but show little sign of coming […]

FOMC Forecasts

The first rule of forecasting should be don’t do it. Nothing good comes from it. The second rule, is, if you give a number, don’t give a date; or, if you give a date, don’t give a number. My rule, the third rule, is, if you have to do it, do it often. Much has […]

The Fed’s Mandate: Single or Dual?

The question of the Fed’s mandate is back on the table. Chairman Bernanke has been asked to address the question in his upcoming monetary policy report to the Congress. More specifically, in what can only be called a strange quirk of timing, the question is whether the country would be better off if the Fed […]

QE2 = 5.0%

QE2 comes to a formal end this month, and just in the nick of time too, since it’s been flooding the markets with newly printed money, making hyper inflation and a collapse of the dollar inevitable. But, wait a minute! What’s that 5 percent all about? Five percent is the latest estimate of the growth […]

Removing Reserve Bank Presidents from the FOMC: Another Bad Idea

As if the Dodd-Frank monstrosity weren’t bad enough, along comes another bad idea that falls under the category of no good deed goes unpunished. Mr. Frank has now proposed that the Reserve Bank presidents be removed from the FOMC. He apparently wants a more centralized central bank, centralized—guess where?—in Washington, D.C. If he gets his […]

China Chronicles

I recently visited China—Shanghai and Hangzhou—for a too-brief five days. I spoke to investor groups about the U.S. economy and its parallels to and interrelationships with China and answered tons of questions from investors and the press about—guess what?—QE2. Why was the Federal Reserve printing so much money, exporting inflation to China and other countries, […]

Eating Bitterness

My title is a Chinese expression that I read in a recent WSJ China Real Time Report. A synonym is “endure suffering.” That article was about how the Chinese financial system is a stacked deck for the high-saving Chinese earning very low, even negative in real terms, rates of interest on their bank deposits. Their […]