Quantitative Easing Archive

News recap comments

The news flow from last week was so voluminous it was nearly impossible to process. For good measure I want to start today’s commentary with a simple recap of what happened. On the negative side – · Greece called a referendum and threw bailout plans up in the air taking Greek 2yrs ...Read More

Payrolls and a Fed rant

Utter failure of policy. The Fed was certain it knew what Japan had done wrong and wasn’t going to make THOSE mistakes. So it Cut rates much more aggressively. Said it would do whatever it takes. Figured out how to do its job as liquidity provider after only 6 months of alphabet ...Read More

President Obama entering the fray

More of the blind leading the blind. The one thing they all agree on, at great expense to global well being, is the budget deficits are all too large and the need for shared sacrifice and all that. No chance for anything constructive to come out of any of this. And these ...Read More

The Euro Zone Race to the Bottom

While the symptoms get continuous attention as they get threatening enough, the underlying cause-the austerity- does not. The euro zone, like most of the world, is failing to meet its further economic objectives because of a lack of aggregate demand. And in the euro zone, the fundamental problem is that the member ...Read More

Macro Curve Considerations

By the end of QE2 the curve had adjusted to the Fed having taken out pretty much all of the new supply out to 10 years. After QE2 the supply out to 10 years started to be replenished auction by auction. This was quickly followed by twist which began working to remove ...Read More

cross currents

I wasn’t sure whether to send this, as it reveals my lack of clarity on current events, but decided to send it to make the point. Here’s what I see: Markets are already discounting a large QE and are also discounting that QE actually makes a difference: The dollar went down Gold ...Read More

Seth Carpenter paper

On Tue, Sep 28, 2010 at 12:36 PM, Eileen wrote: Did Hell freeze over and I missed it?? Seth B. Carpenter and Selva Demiralp, recently posted a discussion paper on the Federal Reserve Board’s website, titled Money, Reserves, and the Transmission of Monetary Policy: Does the Money Multiplier Exist? The authors note ...Read More

Fed Bullard

It’s not just him, the all say ‘quantitative easing’ will ‘work’ when they should now have enough evidence and theory to know all it does is lower interest rates which are already plenty low with regards encouraging lending. Might just be managing expectations but more likely they still actually believe it. *DJ ...Read More


Karim writes: Bullard Definitely out there on his own. FRB would certainly not communicate policy shift through him Also, everyone has different reasons why QE works. Most of the Fed leadership thinks just via interest rate channel and announcement effect. Bullard thinks through monetary channel, which makes him a minority. GDP Data: ...Read More


Markets are getting closer to the idea that: Interest rates don’t/won’t help QE doesn’t/won’t help With the larger point being coming to terms with the possibility the Fed can’t inflate, or do much of anything that actually matters for the real economy, except maybe fund zombie entities to keep them from failing. ...Read More