Category Archives: fiscal and monetary policy

It feels a long time ago right now, but if I recall correctly, Ben Bernanke was talking in a generally positive way at the end of last week about the effects of a well-targeted fiscal stimulus. Well, so much for … Continue reading →

Bloomberg News has some details of the kind of fiscal stimulus George Bush is looking for: The administration is considering a plan that may include $800 rebates for individuals and $1,600 for households as well as tax breaks to encourage … Continue reading →

Portfolio contributing editor Roger Lowenstein has an excellent profile of Ben Bernanke in the NYT this weekend; it hit the web today. Lowenstein is sympathetic, and admiring, but not uncritical: he says at one point, for instance, that "Bernanke must … Continue reading →

Greg Mankiw reacts today to the CBO’s declaration that if you want fiscal stimulus, a temporary increase in food stamp benefits would provide the most bang for the buck. I wonder if we really want to target such cyclical measures … Continue reading →

Was Ben Bernanke reading this morning’s New York Times? "Many on Wall Street," wrote Louis Uchitelle, "argue that with the stock market falling, unemployment rising and the economy flirting with a recession, Mr. Bernanke should be dealing with the situation … Continue reading →

One way of looking at the Fed’s new Term Auction Facility is that it’s the discount window without the stigma. But stigma, it seems, is in the eye of the beholder, and Dean Baker, for one, still seems to think … Continue reading →

In ES Browning’s WSJ stocks report today, he mentions something I haven’t seen anywhere else: Traders pointed to several culprits for the stock pullback: warnings from Bank of America and Wachovia of more credit-loss provisions to come, a gloomy-sounding comment … Continue reading →

The Fed won’t just lend out $40 billion in an attempt to inject some liquidity into the banking system, oh no. It requires collateral. But, as jck says in the comments to my earlier blog entry, it seems as though … Continue reading →

When I said this morning that more details of the Fed’s Term Auction Facility would surely emerge over the course of the day, I didn’t expect Steve Waldman to be the person providing them. But I’m very glad he is. … Continue reading →

Greg Ip has the first best gloss on the Fed’s liquidity-injection announcement: The Fed said today it would create a new "term auction facility" under which it would lend at least $40 billion and potentially far more, in four separate … Continue reading →

Ben Bernanke speaks pretty clearly, for a Fed chairman, and what he said yesterday left few people in any doubt that he’s minded to cut interest rates again at the next FOMC meeting. This is fabulous for equity markets, since … Continue reading →

When is an inflation target not an inflation target? When there’s no accountability, says Clive Crook. There is no real pressure on the Fed to hit its supposed "target". When the Bank of England overshoots its inflation target, it has … Continue reading →

How’s my formula doing, now that the latest FOMC minutes have been released? If you recall, I said that when it comes to the Fed’s inflation target, I=C=H=c=h Where I is the Fed’s de facto inflation target, C is the … Continue reading →

In the Fed’s latest move towards greater transparency, we will now see three-year forecasts for both core and headline inflation four times a year. Greg Ip notes that this is an inflation target in all but name: The projection for … Continue reading →

Steve Waldman, provocative as ever, resuscitates a 2002 speech by Ben Bernanke, wherein the future Fed chairman notes that the central bank has more tools at its disposal than simply raising or lowering the Fed funds rate. Specifically, he says, … Continue reading →

The lead article in the print version of the WSJ this morning is headlined "Fresh Credit Worries Grip Markets". Naturally, it leads with the Fed angle: The angst in the financial markets stood in contrast to the views Federal Reserve … Continue reading →

David Gaffen: "The market the Fed continues to brush off is the currency market… The stock market got what it wanted, which was its candy." Stephen Stanley: "This statement has all the subtlety of a sledgehammer. The FOMC has just … Continue reading →

The 3.9% growth rate in thrid-quarter GDP is only preliminary, but it is very large, and it does give me a little less certain that the Fed is going to cut rates this afternoon. While housing is indeed dreadful, with … Continue reading →

What was that about Bernanke being unpredictable? The markets might not have known earlier this month what the Fed was going to do at its next meeting, but they’re pretty certain now, with pretty much every house on Wall Street … Continue reading →