Interest Rates Archive

A Modest Response

A Modest Proposal for Resolving the Eurozone Crisis By Y. Varoufakis, S. Holland AND J.K. Galbraith 1. Prologue Europe is fragmenting. While in the past year the European Central Bank has managed to stabilise the bond markets, the economies of the European core and its periphery are drifting apart. As this happens, ...Read More

durable goods, Case Shiller, new home sales, Consumer Confidence, Richmond Fed, PMI services flash, GDP comments, 10 yr vs Fed

Down hard and revisions down hard as well, and year over year growth up less than 1%: Durable Goods Orders Highlights Durables orders unexpectedly fell 3.4 percent in December after dropping 2.1 percent in November. Analysts projected a 0.7 percent rise. Excluding transportation, the core slipped 0.8 in December following a decline ...Read More

Japan rate update, Empire manufacturing

‘The market’ sure doesn’t seem to think rates in Japan are going up after decades of 0 rates: This survey just turned radically: New York state manufacturing index lowest in two years: NY Fed Dec 15 (Reuters) — Manufacturing activity in New York state contracted for the first time in nearly two ...Read More

Comments on crude pricing, the economy, and the banking system

Crude pricing The Saudis are the ‘supplier of last resort’/swing producer. Every day the world buys all the crude the other producers sell to the highest bidder and then go to the Saudis for the last 9-10 million barrels that are getting consumed. They either pay the Saudis price or shut the ...Read More

Bill Mitchell on the secular stagnation hoax

The secular stagnation hoax ...Read More

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, or weakens the currency, or that higher rates slow the economy and ...Read More

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 policy, including QE, remains no way supportive of growth and employment, but ...Read More

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. I got my start in serious policy work in 1984-85, as a ...Read More

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

Full size image ...Read More

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 they suspect it very well may persist unless rates come down. Their ...Read More