Category Archives: Fed Policy

AIG Was Broke

There’s a significant problem when you are a supremely big and connected financial institution: your failure will have an impact on the financial system as a whole.  Further, there is no one big enough to rescue you unless we drag out the public credit via the US Treasury, or its dedicated commercial paper financing facility, the […]

Redacted Version of the September 2014 FOMC Statement

July 2014 September 2014 Comments Information received since the Federal Open Market Committee met in June indicates that growth in economic activity rebounded in the second quarter. Information received since the Federal Open Market Committee met in July suggests that economic activity is expanding at a moderate pace. This is another overestimate by the FOMC. […]

The Shadows of the Bond Market’s Past, Part II

This is the continuation of The Shadows of the Bond Market’s Past, Part I.  If you haven’t read part I, you will need to read it.  Before I start, there is one more thing I want to add regarding 1994-5: the FOMC used signals from the bond markets to give themselves estimates of expected inflation.  Because of […]

The Shadows of the Bond Market’s Past, Part I

  Source: FRED Above is the chart, and here is the data for tonight’s piece: Date T1 T3 T5 T7 T10 T20 T30 AAA BAA Spd Note 3/1/71 3.69 4.50 5.00 5.42 5.70 5.94 6.01* 7.21 8.46 1.25 High 4/1/77 5.44 6.31 6.79 7.11 7.37 7.67 7.73 8.04 9.07 1.03 Med 12/1/91 4.38 5.39 6.19 […]

Redacted Version of the July 2014 FOMC Statement

June 2014 July 2014 Comments Information received since the Federal Open Market Committee met in April indicates that growth in economic activity has rebounded in recent months. Information received since the Federal Open Market Committee met in June indicates that growth in economic activity rebounded in the second quarter. This is another overestimate by the […]