In a post over a year ago, I observed that the relative stability of the dollar would come to an end as a confluence of events occurred. Those would be the end to rises in the US interest rates, and the continued increases in policy rates abroad, especially in the euro area and the UK, against a backdrop of a massive current account deficit that requires large and continuous infusions of saving from the rest of the world (and indeed consumes most of the world’s excess saving).
Category Archives: Federal Reserve
Are your inflation expectations well-anchored?
Fed Chair Ben Bernanke’s comments Tuesday about anchors for expected inflation left some analysts unsettled and others mystified. Bernanke was speaking to a group of academic researchers, and I believe his message was intended to provide some insights from practical policy-making to help improve the quality of academic research. So let me offer my interpretation of his message.
Inflation: Local or Global?
What does the empirical literature say about the sources of inflation movements in an era of globalization?
Following yields up and down
Econoblog on interest rates
I was pleased to participate in the latest
Wall Street Journal Econoblog
with Mark Zandi, Chief Economist and co-founder of Moody’s Economy.com. Here’s a brief preview of what you can
find over at the WSJ.
Thinking about import prices, the dollar, and inflation
Some delayed reflections on the May import/export price release, and how to interpret the data in light of the empirics of exchange rate pass through.
More on those rising interest rates
Rising rates look scary, but I still read it as good news.
Lessons from the yield curve
The dramatic upward move of long-term interest rates gives me an opportunity to look back on some of the predictions made on the basis of the inversion of the yield curve, and what might be in store next.
Bernanke on subprime mortgages
If Bernanke isn’t worried about subprime mortgages, should you be?
About that downside
As always, first-rate economic analysis from Fed Chair Ben Bernanke today, and first-rate coverage from Mark Thoma and Kash Mansori, among others.