The Federal Reserve failed to see the oncoming crisis because it couldn’t connect the dots between housing, the banking and the economy, a sociological paper from a California argues. “The Fed’s main analytic framework for making sense of the economy, macroeconomic theory, made it difficult for them to connect the disparate events that comprised the financial crisis into a coherent whole,” the authors say
Posts Tagged ‘federal reserve’
Will continue to discuss unemployment threshold No hard and fast rules on full employment level Rates won’t rise until well past 6.5% if inflation remains low Possibly sees changes to FG in direction of qualitative from quantitative Extended low rate environment can spark risky behaviour FEd looking at anything that could cause bubbles, leverage, credit growth, financial institutions interest rate risk There’s still pockets that concern the Fed like underwriting standards in leveraged lending
He says we need to be mindful of the risks that create risks that are risky. Sounds..err…risky
Seriously, she does. Ok, I’m into Red Bull OD territory, whoop whoop.
Speaking to Fox business. Recently he spoke about forward guidance moving to a qualitative stance rather than quantitative.
Lawmakers should consider how to spur job creation
Bullard not saying it with enthusiasm but I don`t want to read too much into it.
The Fed is feeling boxed in by forward guidance looking for unemployment below 6.5% and won’t want to make the same mistake twice. Fisher spoke with reporters after his speech and said it’s ‘hard ‘ to provide quantitative guidance and that current benchmarks need to be adjusted.
The New York Times reports that the Fed will release transcripts from several policy meetings in 2008 today. The transcripts are overdue but it will be very interesting to hear comments as the crisis was brewing and happening.
The world is pawing through the trove of transcripts from the crisis.
That comment carries more weight because it comes from a dove. Evans is saying the Fed will likely cut purchases by $10 billion more (down to $65B/month) in the upcoming meeting but in March the pace could be scaled down at a faster pace if the economy continues to improve.
Bernanke is exiting the central bank stage on January 31 so today’s speech at 2:30 pm will be one of his last. He’s speaking in Philadelphia at the American Economic Association’s annual meeting and it’s being billed as his last major speech
My quick estimate shows about $1.1 trillion in QE3 so far, leaving $400 billion remaining. If you assume the current pace continues in Dec, Jan and Fed that leaves only $145 of room which would suggest a rapid taper.
Comments from Evans: I am not in a hurry myself to reduce the flow of Fed bond purchases We have seen improvement in labor market but need more confidence in sustainability Low inflation is adverse but not yet ringing alarm bells One way to offset potential end of QE3 would be to lower unemployment thresholds He would back lowering employment thresholds to 5.5% Evans is a dove’s dove so this is no surprise.