Tag Archives : federal reserve

US Fed’s Pianalto says deflation is still a risk

excessively low inflation is a sign that the US economy not firing on all cylinders You’re not alone there madam! But bonus points for being brave enough to use the dreaded “D” word unemployment “remains elevated”, long term jobless is a “significant concern” expects about 3% GDP growth in 2014  and 6.2% unemployment by year end Comments on the wires from Sandra Pianalto, who is stepping down at the end of May after 10 years as president of the Cleveland Fed. She has recently praised the U.S

Fed failed to make connection between housing, banking and the economy, research paper says

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

Yellen sees many views on forward guidance

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

Fed’s Fisher: My guess is Fed guidance will be more qualitative

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.

Evans says pace of taper should continue in Jan, could be more aggressive in March

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.