Today the Federal Reserve announced a further 50-basis-point cut in its target for the fed funds interest rate, bringing it down to 3.0% for a total reduction in January of 125 basis points. How long should it take before this has an effect on the economy?
Category Archives: Federal Reserve
Another day, another dollar
It was a fun day to be a macroeconomist, don’t you think?
The Fed makes its move
The Federal Reserve announced today it was lowering its target for the fed funds rate 75 basis points, from its previous value of 4.25% to a new value of 3.5%.
The case against fiscal stimulus
Everybody else seemed to hear Bernanke say he was in favor of fiscal stimulus as one approach to our economic problems. But I instead heard him articulate very intelligently the potential pitfalls of the strategy.
Will inflation fears restrain the Fed?
I think not, and here’s why.
The Implications of a Textbook Analysis of Macro Stabilization via Discretionary Fiscal Policy
From Reuters:
If Bush and Congress are to act at all, they will have to move quickly to have any impact, says Alan Auerbach, an economics professor at the University of California, Berkeley, who has done research on the effects of fiscal stimulus.
“Timing is extremely important,” he says. “Recessions typically last less than a year, so unless you can be pretty quick, it’s not worth doing.”
How low will Ben go?
Was 25, now we have 50. Do I hear 75?
What Are the Prospects for a Two Recession Bush Presidency?
With recession calls becoming more frequent ([1], [2], [3], [4], [5]) it might pay to revisit the indicators that the NBER looks at in determining the turning points in recessions (The fact that NBER put up some new recession-dating-FAQs just a couple days ago might be a leading indicator of sorts).
Economic indicators take a turn for the worse
No cheer for the New Year from the numbers released this week.
Monetary policy using the asset side of the Fed’s balance sheet
An interesting trend has developed in the Federal Reserve’s asset holdings, a trend that the newly created term auction facility is designed to accelerate.