Institutional Investor (January 29)
“There will be no interest rate increase from the FOMC before December 2015.” Even though the Federal Reserve has indicated a mid-year increase, Institutional Investor believes this will be delayed. Members of the Federal Open Markets Committee “are acutely aware of the asymmetry of risk around the timing of rate hikes. That is, the cost of raising rates too soon—and stifling a domestic-focused, consumer-driven economic recovery—is viewed as considerably higher than the cost of raising rates too late.”
Tags: Asymmetry, Economic recovery, Federal Reserve, FOMC, Increase, Interest rates, Risk, Timing
The Economist (July 19)
The weak recovery continues in the U.S. with many economists estimating potential growth of 1.75%-2.0%. “Evidence is mounting that America’s potential growth rate has plummeted…. Solving the short-term problem means boosting demand, so the Federal Reserve should keep interest rates low. But to pep up long-term growth, America also needs to address the supply side. In particular, it needs more workers and faster increases in productivity.”
Tags: Federal Reserve, Growth, Interest rates, Productivity, Recovery, U.S., Weak, Workers
Wall Street Journal (January 26, 2014)
As the Federal Reserve begins tapering, we’ll see which emerging markets have “been swimming naked.” During the days of easy money, nearly anybody could enjoy the party. Now we’ll see which countries squandered the opportunity and left themselves exposed. “The end of Ben Bernanke’s Fed tide will have its uses if it spurs the kind of tax, trade and investment reforms that have been put off in too many places. The question is how much damage will be done as this global adjustment takes place.”
Tags: Ben Bernanke, Damage, Easy money, Emerging markets, Exposed, Federal Reserve, Global adjustment, Investment, Opportunity, Reforms, Squandered, Tapering, Tax, Trade, U.S.
The Economist (November 23, 2013)
Impatient with European dithering, “the Federal Reserve will soon publish rules governing the operations of big foreign banks that will, in effect, throw up a wall around America’s financial markets.” This is understandable, but likely to lead badly as the Europeans retaliate with their own restrictions, fragmenting the global banking system. Instead, “America should give global banking rules—and Europe’s dilatory regulators—one last chance.”
Tags: Europe, Federal Reserve, Financial markets, Global banking rules, Regulators, Restrictions, Retaliation
Euromoney (November Issue)
“Janet Yellen is eminently well qualified to lead the Federal Reserve. But investors should not assume that continuation of policy as normal comes without risk. Her dovish stance on inflation is worth noting and hedging against.”
Tags: Dovish, Federal Reserve, Hedging, Inflation, Investors, Janet Yellen, Policy, Qualified, Risk
Washington Post (September 19)
The massive economic power of the Federal Reserve again moved markets this week. “This much Fed power is not in the long-term interest of the U.S. economy, nor that of the world. We say this not because the Fed’s policies under Mr. Bernanke have been wrong. To the contrary, taking interest rates to zero was aggressive but appropriate in the face of an epic recession…. Yet the Fed’s huge role represents more responsibility for the economy than a single technocratic institution — or any one fallible, unelected official, even a dedicated, talented one such as Mr. Bernanke — should bear for too long.”
Tags: Aggressive, Ben Bernanke, Bernanke, Economy, Federal Reserve, Institution, Interest rates, Power, Recession, Responsibility, U.S.
Washington Post (September 16)
Acknowledging he was tainted, Lawrence Summers withdrew from consideration for appointment as Federal Reserve chairman. Global markets surged as the dovish Janet Yellen now looks better positioned to win the influential post. “Shed no tears” for Larry. “Though brilliant, the Harvard economist has nonetheless ticked off too many people in his long and brash career, not only on policy grounds but also because of his famously caustic personality. Note to future careerists: Niceness counts.”
Tags: Career, Chairman, Economist, Federal Reserve, Global markets, Harvard, Janet Yellen, Lawrence Summers, Niceness, Personality, Policy
New York Times (July 30)
President Obama will need to appoint a replacement later this year to replace Federal Reserve Chairman Ben Bernanke when his term expires in January 2014. The incoming Chairman will be challenged to delicately wind down the Fed’s massive quantitative easing measures. Camps of support are already arising around the two front runners Lawrence Summers and Janet Yellen. The New York Times comes down firmly in the former’s support, writing “no one else can match Janet Yellen’s combination of academic credentials and policy-making experience. And no one ever confirmed to the job has come to it with as deep a grounding in both the theory and practice of monetary and regulatory policy as Ms. Yellen would bring.” Should she be confirmed, she would also become the first woman to head the Fed.President Obama will need to appoint a replacement later this year to replace Federal Reserve Chairman Ben Bernanke when his term expires in January 2014. The incoming Chairman will be challenged to delicately wind down the Fed’s massive quantitative easing measures. Camps of support are already arising around the two front runners Lawrence Summers and Janet Yellen. The New York Times comes down firmly in the former’s support, writing “no one else can match Janet Yellen’s combination of academic credentials and policy-making experience. And no one ever confirmed to the job has come to it with as deep a grounding in both the theory and practice of monetary and regulatory policy as Ms. Yellen would bring.” Should she be confirmed, she would also become the first woman to head the Fed.
Tags: Appointment, Ben Bernanke, Chairman, Federal Reserve, Janet Yellen, Lawrence Summers, Obama, Quantitative easing, Replacement, U.S.
Wall Street Journal (June 29)
“The real lesson of recent days concerns the Fed’s ability to exit from its extraordinary interventions. The mere hint that the Fed might eventually taper its bond purchases sent markets into anxious gyrations…. Imagine the uproar when the Fed finally decides to act, as it eventually must.”
USA Today (June 20)
“Rather than blaming the Fed for this week’s market fall, people should thank it for nursing stocks back to health since the sickening market bottoms of March 2009. Dr. Bernanke’s challenge in his remaining months as Fed chairman will be to taper off the medication without harming the patient.”
Tags: Ben Bernanke, Blame, Federal Reserve, Health, Market fall, Stocks, U.S.
