Today’s employment situation release depicted a picture of continuing recovery in the labor market. One interesting aspect is what is happening to the tradables sector, which I proxy with the manufacturing sector. There, the advance data indicate a slight decline.
Category Archives: Federal Reserve
At the Current Pace, the 2-10 Will Invert in December
Holding to the Old Faith
Figure 1: Ten year-3 month Treasury yield spread (bold dark blue), and ten year-two year Treasury yield spread (bold dark red), and projections at current pace using 2017M01-18M08 sample (light blue and pink lines), in percentage points. August 2018 observation through August 27th. NBER defined recession dates shaded gray. Light orange denotes Trump administration. Source: Federal Reserve Board via FRED, Bloomberg, NBER, author’s calculations.
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Guest Contribution: “Rising US Real Interest Rates Imply Falling Commodity Prices”
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A version appeared earlier on his blog.
Taylor Rule Implied Rate, Trump-Annotated
“I don’t like all of this work that we’re putting into the economy and then I see rates going up.”
and a tweet on Saturday:
Tightening now hurts all that we have done.
Worries about the yield curve
Several people have asked me if the flattening yield curve is a warning of impending weak growth or even a recession. My answer is not yet. Here’s why.
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Guest Contribution: “The European Central Bank’s Lack of Accountability Has Consequences”
Today, we are fortunate to present a guest contribution written by Ashoka Mody, Charles and Marie Visiting Professor in International Economic Policy, Woodrow Wilson School, Princeton University. Previously, he was Deputy Director in the International Monetary Fund’s Research and European Departments.
The European Central Bank (ECB) was set up as the most independent of all central banks. Its independence also made it unaccountable. Freed from public accountability, the ECB’s decisions have been swayed by its management’s ideological preferences and by national interests. The consequence is that some eurozone countries are now subject to long-term deflation risk and are locked into a currency that is too strong for their economies.
Podcast on econometrics, oil shocks, and monetary policy
I had an interesting discussion on a range of topics with David Beckworth which you can
listen to as a podcast from Macro Musings.
A skeptical view of the impact of the Fed’s balance sheet
That’s the title of a paper with David Greenlaw, Managing Director of Morgan Stanley, Ethan Harris, head of global economics research at Bank of America Merrill Lynch, and Kenneth West, professor of economics at the University of Wisconsin, which we presented at the U.S. Monetary Policy Forum annual conference in New York on Friday.
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Janet Yellen: A True Public Servant
Janet Yellen ended her term as Chair of the Federal Reserve today.
Source: Federal Reserve
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Guest Contribution: “Three Candidates for Fed Vice-Chair”
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers.