What is the significance of the fact that the most recently issued subprime mortgages are the ones that are running into the biggest problems?
Category Archives: Federal Reserve
Inferring market expectations from changes in fed funds futures prices
I recently completed a new research paper studying how interest rates of different maturities change with market expectations of what the Fed is going to do next.
What’s a “Strong Dollar”?
I used to wonder about the use of this term a lot, at least in the context of government pronouncements. Here’s my answer. First, the use of the term in context. From Bloomberg:
Weak Dollar Boosts Growth Without Fueling Inflation (Update1)By Matthew Benjamin and Vivien Lou Chen
Oct. 8 (Bloomberg) — Treasury Secretary Henry Paulson, whose signature appears on every new dollar bill, may find the weak currency with his name on it helps the U.S. economy more than the strong one he publicly endorses.
Not all the news is bad
We’ve been dwelling here quite a bit on the bleak incoming housing data. But I have to admit that I’m not seeing that spilling over so far into some of the other key economic indicators.
Pick a finger
Princeton Professor Alan Blinder offers his thoughts in the New York Times on who’s to blame for the mortgage mess, getting the attention of Mark Thoma, Dave Iverson, Brad DeLong, and Greg Mankiw. Here are my two cents.
More troubles for housing
New data released today portend continued weakness for housing.
What would be the implications of stagflation for the dollar?
The dollar is declining, with no apparent support. That’s because the recessionary factors seem to be dominating. But a reporter’s question about what factors might support the dollar prompted me to think about other influences that might work in a direction opposite the forces alluded to in the conventional wisdom.
Money creation and the Federal Reserve
There seem to be some misconceptions about the monetary consequences of actions that the Federal Reserve has taken to address liquidity needs.
Forward rates and inflation expectations
Forward rates on Treasury bonds tell an interesting story about the market’s reaction to the Fed’s interest rate cut on Tuesday.
Divining the Dollar
The dollar declines in response to the drop in the target Fed Funds rate. What next?