Amazingly, gasoline futures on the New York Mercantile Exchange today ended back where they were before Hurricane Katrina struck with all its fury. Retail prices will likely follow that lead. But what about the Fed?
Category Archives: Federal Reserve
Recession in 2006-07?
If you just extrapolate the dynamics of past economic expansions, you’d say that a recession within the next few years is quite possible but by no means certain. The question is how much weight you want to attach to some of the other factors.
Talk of recession
Nine out of the ten recessions in the United States since World War II were preceded by a spike in oil prices. Nevertheless, for the past year, I’ve been telling people that this time it’s going to be different– the economy could weather the rising price of oil without a downturn. Developments of the last couple of weeks make me a little more concerned.
Is there a danger that the Fed will fall behind the inflation curve?
Both Macroblog and Capital
Spectator raise the prospect today that rising long-term yields might mean that the Fed
waited too long before trying to stamp out the cinders of an incipient inflation fire. I would
suggest instead that the increase in long-term yields over the last few months is the natural
development that we expect to see in a situation of Fed tightening and has little to do with
inflationary expectations.
When should we worry about the yield curve?
The slope of the yield curve is likely to become an increasingly bearish indicator as this year progresses, and recent changes in the calculation of the index of leading economic indicators should not be interpreted as in any way denying that fact.
Why the Fed needs to slow down
The Fed has promised to keep on raising interest rates at a “measured pace.” I just prefer
they’d measure their pace a little more slowly.
The puzzle of long-term yields
Sherlock Holmes solved one of his cases by noticing a dog that didn’t bark. Well, here are a
few canines that don’t seem to be yipping around the decline in long-term bond yields.
How high will the Fed push interest rates?
Here’s one way you can figure out if you’ve pulled the car far enough into your garage– if
you run into the wall, you went too far. Hopefully the Fed has another plan for how to decide
when to stop raising the fed funds rate.
Babble about a housing bubble
There’s been much discussion recently of whether the U.S. is experiencing a speculative bubble in house prices. Like previous historical bubble sightings, this one only seems to pop up in situations where the fundamentals on their own might justify significant price increases.
Worries about the yield curve
The yield curve has inverted eight times in the last half century, and in six of those
episodes, the U.S. ended up in recession. Some analysts are concerned that we may see a ninth
inversion before the end of this year.