Category Archives: Interest Rates

Bill Mitchell on the secular stagnation hoax

The secular stagnation hoax

Posted in Employment, Government Spending, Interest Rates |

There is no right time for the Fed to raise rates!

There is no right time for the Fed to raise rates! Introduction I reject the belief that economy is strong and operating anywhere near full employment. I also reject the belief that a zero-rate policy is inflationary, supports aggregate demand, … Continue reading

Posted in Deficit, Fed, Government Spending, Interest Rates, Proposal |

Fed policy comment

So the theme is ‘the Fed is getting behind the curve’ That is, Yellen keeps rates ‘too low’ causing the economy to overheat. Complete nonsense, of course, but it drives markets until it doesn’t. Much like QE. The 0 rate … Continue reading

Posted in Fed, Interest Rates | Tagged |

Comments on Stanlely Fisher’s ‘Lessons from Crises, 1985-2014′

Lessons from Crises, 1985-2014 Stanley Fischer[1] It is both an honor and a pleasure to receive this years SIEPR Prize. Let me list the reasons. First, the prize, awarded for lifetime contributions to economic policy, was started by George Shultz. … Continue reading

Posted in Banking, Bonds, CBs, Credit, Currencies, Deficit, ECB, Employment, Government Spending, Housing, Interest Rates |

Remember all the talk about the deficit causing rates to go up in Japan?

Full size image

Posted in Bonds, Interest Rates, Japan |

existing home sales chart, real final sales chart (pre weather)

Yes, the Fed doesn’t like QE and wants to taper, but seems to me they don’t want mortgage rates this high either. They know the only way the market will ‘bring down rates’ is if the economic weakness persists. And … Continue reading

Posted in Fed, GDP, Housing, Interest Rates |

Interest rates and consumption

Who would have thought? ;) Thanks Art. The equation at the core of modern macro By Noah Smith “…the Euler Equation says that if interest rates are high, you put off consumption more. That makes sense, right? Money markets basically … Continue reading

Posted in Interest Rates |

History will have a field day with this one!

After watching Japan for 20 years and the US for the last 5 he never did figure out that low rates impart a deflationary bias. From Keynes: Worldly wisdom teaches that it is better for reputation to fail conventionally than … Continue reading

Posted in Fed, Interest Rates |

Yes, the Fed can set mortgage rates if it wants to!

One of the main reasons for the Fed’s (near) 0 rate policy is to support the housing market. And after nearly 5 years of 0 rates, and mortgage rates dipping below 3.5%, though ‘off the bottom’ housing remains far below … Continue reading

Posted in Bonds, Fed, Interest Rates |

How Concerned is Bernanke about his possible legacy?

I suspect the Chairman is seriously concerned about living out his life with his legacy, as told by the mainstream, going something like this: “Blindsided by an intense financial crisis, the Chairman, a champion of full employment and student of … Continue reading

Posted in Fed, Housing, Interest Rates |