I still say that many pundits are using the wrong paradigm for interpreting the public pronouncements of the new Federal Reserve Chair.
Category Archives: Federal Reserve
Who’s afraid of $3 gasoline?
Does the expected strong 2006:Q1 GDP report mean that the economy will shrug off the recent resurgence of gas prices?
The yield curve and predicting recessions
Jonathan Wright, a brilliant research economist at the Federal Reserve Board, recently completed a very interesting paper titled The Yield Curve and Predicting Recessions. Wright’s research seems to have been influential in Fed Chair Ben Bernanke’s recent assessment that the current very flat yield curve does not signify a coming significant economic slowdown.
What’s moving long-term yields?
Long-term interest rates continue to creep up.
Learning the new Fedspeak
Curious reaction from both markets and pundits to yesterday’s statement from the FOMC accompanying the decision to boost the fed funds rate another 25 basis points.
Inflation concerns
The Bureau of Labor Statistics reported that inflation as measured by the seasonally adjusted consumer price index for all urban consumers rose only 0.1% in February (a 1.2% annual rate), down from 0.7% (an 8.4% annual rate) in January. Those who view the monthly CPI as the most important inflation indicator breathed a sigh of relief, perceiving the economy to have lurched from hyperinflation back to price stability within the space of 30 days.
Rising long-term yields
The yield on 10-year U.S. Treasuries is up almost 40 basis points so far this year, which means it’s been gaining on the fed funds rate and reducing the prospect of full inversion of the yield curve. Why have rates been going up?
Autos limp forward
Could be better, could be worse.
The Bernanke era begins
New Fed Chair Ben Bernanke
provided his first testimony before Congress this morning.
Gold and inflation
What’s behind the ongoing run-up in gold prices? One popular interpretation is that investors fear a resurgence of U.S. inflation. But that story just doesn’t square with the facts.