Bernanke Archive

Two quick comments on inflation

Bernanke may be reminded of the reason the dual mandate includes inflation – voters don’t like inflation even more than they don’t like unemployment. As inflation rates rises into the March 18 meeting, with the FF rate at 3% the real rate falls, which the FOMC sees as ‘easier’ policy. ...Read More

Re: update

Dear Philip, Seems there’s a break between Mishkin and Kohn that previously wasn’t there. Markets are thinking Kohn supports a 50 cut and that he and Bernanke are alligned. Today Bernanke may show whether he leans towards Mishkin, the co academic, or Kohn, more the practitioner. Meanwhile, another ‘inflation day’ with oil ...Read More

Bloomberg: Fed Sees Rate Low `for a Time’ Then Possible Reversal

Fed Sees Rate Low `for a Time’ Then Possible Reversal (Update1) by Scott Lanman (Bloomberg) Federal Reserve officials signaled they are prepared to quickly reverse last month’s interest-rate cuts after concluding that borrowing costs need to be kept low for now. Policy makers cut their 2008 growth forecasts and said that rates ...Read More

Bernanke written testimony

As you know, financial markets in the United States and in a number of other industrialized countries have been under considerable strain since late last summer. Heightened investor concerns about the credit quality of mortgages, especially subprime mortgages with adjustable interest rates, triggered the financial turmoil. However, other factors, including a broader ...Read More

Bernanke preview

If inflation is now above Bernanke’s comfort zone, as per Yellen who has been more dovish than Bermanke, and above their long-term target of maybe 2%, it can only be brought down by maintaining an output gap greater than zero under the mainstream theory they all subscribe to. Particularly with the negative ...Read More

Stagflation

Yes, the below analysis has also been the Fed’s position, up until this week’s speeches. It’s been about a crude/food/$ negative supply shock, supported by Saudis/Russians acting as swing producer and biofuels linking crude prices to food prices. The fed has called the price hikes relative value stories that they don’t want ...Read More

Tax cuts, oil prices, and gasoline consumption

Oil prices jump after Bush, Congress reach agreement on economic stimulus plan by John Wilen Oil futures jumped more than $2 a barrel Thursday after the Bush administration and Congressional leaders agreed to an economic stimulus plan that will give most Americans tax rebates of $600 to $1,200, or even more if ...Read More

Re: Will the cure be worse than the disease?

(an interoffice email) > the only problem i have with Meltzer is that is the consensus view now, > that inflation is a foregone conclusion-i think long term that may be > right (long term paper currency devaluation) but you could easily > correct commodity and energy prices if you have a ...Read More

Fed comments

The Fed is aware rate cuts don’t do much for near term financial disruptions. For example, the FF/LIBOR spread was first addressed with FF cuts, but little or nothing changed until the TAF was introduced to address and normalize that spread. Along the same lines, Bernanke has recently met with the President ...Read More

I’ve been wrong on the Fed

> Hi > > You’ve been looking for this kind of financial trouble for a bit over in Europe. Good call Warren. > > Bobby. > Thanks, yes, I called it from mid 2006 – weakness due to deficit too small to support the credit structure, but inflation racing up as food/fuel ...Read More