Interest Rates Archive

BOJ’s Shirakawa: Fully Committed To Asset Purchases To Meet 1% Inflation Target

Right, they’ve only been doing it for a couple of decades, monetary policy works with a lag… BOJ’s Shirakawa: Fully Committed To Asset Purchases To Meet 1% Inflation Target By Chana R. Schoenbergrand and Stephen L. Bernard April 18 (Dow Jones) — The Bank of Japan remains determined to purchase more assets ...Read More

The President’s Fairness Fiction

President Obama’s ‘Fairness’ Vision Would Bankrupt Nation April 11 (IBD) — Economy: In two recent high-profile policy speeches, President Obama has struggled to make a case for his big-government, high-tax vision for the economy. But his comments reveal just how bankrupt his vision is. Last I read, he’s actually reduced govt head ...Read More

Japan Must Overhaul Taxes to Avoid Bond Rout, Bank Lobby Says

Translation: Japanese bankers are against growth because it might cause losses from rate hikes? Japan Must Overhaul Taxes to Avoid Bond Rout, Bank Lobby Says By Shigeru Sato and Takako Taniguchi April 1 (Bloomberg) — Japan must avoid delaying an overhaul of the tax system to prevent government borrowing costs from spiraling ...Read More

Global themes

Austerity everywhere keeps domestic demand in check and export channels muted Non govt credit expansion pretty much stone cold dead in the US and Europe Rising oil energy prices subduing global aggregate demand US federal deficit just about enough to muddle through with modest GDP growth Rest of world public deficits also ...Read More

New Home Sales Unexpectedly Slip 1.6% in February

Seems low interest rates aren’t all the tool they’re cracked up to be? But they’ve only been low for a bit over 3 years. Monetary policy works with a lag and all that. Much like Japan. Again like the carpenter said of his piece of wood, no matter how much cut off ...Read More

GE to 3M Pension Pain Mounts as Rates Boost Liabilities

Feel free to forward to your local Fed President, to remind them that rate cuts do remove income from savers and from the economy in general, as the economy is a net saver to the tune of the cumulative govt debt (to the penny). (And not to forget the $80 billion or ...Read More

Another Gross error.

Another Gross error. Bank’s aren’t allowed to take what’s called ‘interest rate risk’ by borrowing short and lending long. It’s the first thing the regulators and supervisors look for. It’s the S in CAMELS ratings- Capital, Asset quality, Management, Earnings, Liquidity, and Sensitivity to interest rates. Fed’s Low Rates Killing Credit, Slowing ...Read More

One of the interest income channels

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US Pension research article

This is from modest returns and low rates causing ‘savers’ to have to pony up more to provide future nominal incomes. And it’s a drag on aggregate demand which should be a good thing, as it means we can have lower taxes for any given size govt. But instead, of course, we ...Read More

The Fed is Starving Economy of Interest Income – US Business News Blog – CNBC

The Fed is Starving Economy of Interest Income By Warren Mosler He left out the part about needing a fiscal adjustment to compensate but this is part one of a three part presentation of something I wrote. ...Read More