Wall Street Journal (June 11)
Unemployment has been slowly trending down in the U.S. but still remains too high. The Federal Reserve has been doing everything it can to improve the situation, but there are limits to monetary policy. In contrast, “the fiscal cupboard is not bare. There are things we could be doing to boost employment right now. That we are not doing anything constitutes malign neglect of the nation’s worst economic problem.” Instead of complacency, “policy makers should be running around like their hair is on fire…. Congress could make a good start on faster job creation simply by ending what it’s doing—destroying government jobs.”
Euromoney (May Issue)
“The central bank-driven global money-go-round has been turning ever faster since last summer. Now the Bank of Japan has turbo-charged it. So far, investors are enjoying the ride. But a bout of nausea cannot be ruled out.”
Tags: Bank of Japan, Central banks, Expansion, Investors, Monetary policy, Outlook, Risk
Financial Times (April 30, 2013)
In the U.S., the Federal Reserve is coming under fire and a Congressional review has been proposed. While the Fed’s performance has not been perfect, “on the whole, the Fed has not done a bad job. Banks are stronger, the banking system functional and taxpayers increasingly in the money. Neither the UK, the eurozone, nor Japan can boast of the same. That has also made the Fed’s monetary policy much more efficient than in those economies, where the transmission of central bank money-printing to real-economy activity remains broken.”
Tags: Congress, eurozone, Federal Reserve, Japan, Monetary policy, U.S., UK
Chicago Tribune (December 14)
“The Fed helped the nation through a crisis. Now it could be creating risk.” The Fed has indicated it will maintain near-zero interest rates until the unemployment falls below 6.5% or inflation rises above 2.5%. This monetary policy was championed by Chicago Fed President Charles Evans, an inflation dove and policy activist, but the policy is misguided. “At this stage of the recovery, the biggest drags on the employment market have little to do with credit availability and interest rates — factors where the Fed does have influence — and much to do with the failures of elected politicians to fix spending and tax policies…. The central bank just isn’t all-powerful…. The Fed risks becoming a source of the problems it has done so much in recent years to help resolve.”
Tags: Evans, Inflation, Monetary policy, Risk, Spending, Tax, Unemployment
Financial Times (September 21)
Concern is dampening initial celebration over the third quantitative easing (QE3) program, which was announced by Federal Reserve Chairman Ben Bernanke last week. This monetary program is not a substitute for a proper fiscal solution. QE3 is neither a “free lunch,” nor without risk. Still, “Mr Bernanke has shown commendable bravery in compensating for Congress’s inaction. But his aggressive policy stance will not work forever. US politicians would be foolish not to use wisely the time the Fed has bought them.”
Tags: Bernanke, Congress, Fed, Fiscal policy, Monetary policy, QE3, U.S.
