Today’s mythbusting: the Fed is not suppressing interest rates

Summary: Here's another in my series of economic myth-busting articles, explaining that the Fed is not suppressing rates. It is a follow-up to Ignore The Bond Bears, The Fed Will Not Raise Rates. Part of the magical, even divine, powers attributed to the Federal Reserve is their ability to set interest rates -- both short- … Continue reading Today’s mythbusting: the Fed is not suppressing interest rates

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The Fed Will Not Raise Rates In The Foreseeable Future

Summary: Since 2010 I have said that the economy is locked in slow-mo and the Fed will not start a new rate cycle. It's even more true today than in 2010. Many investors and economists are convinced that the Fed will soon end its near-zero interest rate policy and begin raising rates - "normalizing them". … Continue reading The Fed Will Not Raise Rates In The Foreseeable Future

ECRI looks at our Great Monetary Experiment: It’s Too Big to Fail

Summary: The Economic Cycle Research Institute (ECRI), who correctly predicted the slow recovery, explains the slow growth in which the US and Japanese economies are mired, and the fantastic monetary experiment waged by central banks to prevent them slumping into recessions. Appreciate the wonders of our time. The recovery since 2008 has been difficult for … Continue reading ECRI looks at our Great Monetary Experiment: It’s Too Big to Fail

Stratfor: Germany and ECB Face Off. Better than any WWF fight.

Summary: The monetary experiments central banks are running in Japan, Europe, and America will shape the global economy of the 21st century -- no matter what the result. Here Stratfor looks at the growing tensions between the ECB and Germany. It's a sound analysis. But note Stratfor's top-down perspective. By "Germany" they refer not to … Continue reading Stratfor: Germany and ECB Face Off. Better than any WWF fight.

The Government Has A Clip Full Of Ammo To Fight The Next Recession

Summary: It's time to prepare for a possible recession in 2016. The manufacturing slump continues to deepen. A toxic combo: high inventories in November and weak retail sales in December. In February this expansion will tie for the 3rd longest expansion. {2nd of 2 posts today.} The Atlanta Fed's GDPnow model just lowered its est … Continue reading The Government Has A Clip Full Of Ammo To Fight The Next Recession

Why did the Fed raise rates? For the opposite of the reason they gave…

Summary: The Fed Governors told us they planned to raise rates, and months ago told us when they would do so. But their explanation of why they raised rates makes little sense. We can see their thinking by looking at the economic projections released at the Open Market Committee meetings. They raised rates not because … Continue reading Why did the Fed raise rates? For the opposite of the reason they gave…

What Will the US Do in a Recession? Look to Japan for Answers…

Summary: In a previous article I listed the powerful tools the US government would deploy during the next recession. Today we discuss something more important: will they work? We can look to Japan for an answer. Their great stagnation began with the 1989 crash, 11 years before the tech bubble burst and began America's new … Continue reading What Will the US Do in a Recession? Look to Japan for Answers…