Monetary Policy
87 Threads
What has the Fed actually done to beat 40 year highs in inflation? Historically speaking: Very little to nothing. Financial conditions remain in accommodative territory. The Fed h...
If Central Banks only print bank reserves, why do they continue to engage in QE? Because under certain conditions, QE sets up a virtuous cycle for capital flows towards risk asset...
Macro Overview from a former senior trader at the Federal Reserve. We studied Joseph Wang (@fedguy12) to learn what may be next for financial markets and monetary policy. An insi...
1/9 This, to me, is intellectual laziness: "China and Japan have managed inflation well, despite being exposed to big surges in energy and food costs. Both exercised reasonable con...
βWhat are the effects of QE on interest rates?β This is truly not an easy question. It depends on so many things: horizon, direct/indirect, ceteris paribus and even oneβs level of...
The Monetary Policy Committee voted by a majority of 8-1 to increase #BankRate to 1.75%. Find out more in our #MonetaryPolicyReport: https://t.co/389XbdQZWf https://t.co/OcqtaWjFuX
1/2 The ECB hike 50 bps to 0.00%. The first time since 2014 the policy rate has not been negative. Before today's hike, the amount of negative yielding debt was a six-year low....
We usually and appropriately analyze monetary and fiscal policyβs impact on output and inflation almost entirely through the lens of demand. That is because those effects are much...
An "inverse policy rule" is a useful gut check on monetary policy. Policy rules show what interest rates should be given inflation & unemployment (or output) if policymakers foll...
Writing a new ET note on the financialization of the US economy. Here's the skinny. Alan Greenspan believed that an activist Fed could grow our wealth faster than we could grow ou...
A brief history of global monetary policy since 2008 (with reference to the ECB's and the Fed's slow exit from ultra-easy monetary policy & Japan's current run-away quantitative...
How did the Fed fall behind the curve last year? We interviewed current and former Fed officials and outside analysts and came up with four mistakes. Each compounded on the oth...
The Fed approved a 75 basis point increase on Wednesday, the largest rate rise since 1994. All officials projected rates rising to least 3% this year.
At some point there should be a serious debate about the utility of forward guidance for *tightening* monetary policy. There is a strong case for forward guidance for easing when...
A thread on Quantitative tightening. After reading this thread you will come to know: 1. What is QT? 2. What happened with the last QT & What is happening now? 3. Why is QT requi...
FED THREAD: Would the Fed surprise markets by doing a 75-basis point increase next week? Much of their tightening this year has been about shaping expectations. Do big surprises h...
MONETARY POLICY & Hidden Gains 2022 saw a boost in tax revenues. How? Since 2008, Low rates caused >100 T of asset inflation HENCE unrealized gains. That represents ~10-30 T of fu...
Ways in which monetary policy became highly asymmetric (some individually defensible but collectively not, many since abandoned): 1. SINGLE MANDATE. Required maximum employment be...
Intro to Quantitative Tightening On June 1st, the Federal Reserve will begin to aggressively shrink its $9T balance sheet through QT. But what even is QT and how might it impact...
Monetary policy at work, throttling back demand in rate-sensitive sectors: New home sales fell 16.6% in April from March to 591,000 (a seasonally adjusted annual rate). That is t...
The RBI has hiked the repo rate by 40 bps up to 4.40% from 4% earlier! π€― But 1st letβs understand what Repo rate is? And what does it mean for investors, borrowers & customers? -...
A very dovish Powell, but he is making a communication mistake here. A thread on the Fed! 1/13
The Fed is going to tighten monetary policy until something breaks. Something like Treasury market liquidity or credit market liquidity. While ISM PMI is declining. Being defensiv...
1/ Wild new IMF paper "The Electronic Money Standard" outlines a financial future where citizens cannot save because CBDCs with deep negative interest rates allow central bankers t...
