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’Bernanke: recovery now, thrift later, generic speeches in the meantime
Not much interesting in Bernanke’s testimony to the House of Representatives this morning, but given his many previous warnings that premature fiscal tightening could stifle the weak recovery, he probably hopes listeners will tune out this par…
Markets Live special edition – FOMC presser
The Bernanke Bowl, Fedstock, Fedapalooza, Ben and Fed’s Excellent Adventure.
We wouldn’t bring back the cheesy nicknames for just any FOMC presser, but given the unveiling of the federal funds rate forecasts for the first time ever,
Fedwire says keep an eye on Williams, who is handy with a printer
Fedwire says we should be watching John Williams, the San Francisco Fed governor who this year becomes a voting member of the FOMC. Jon Hilsenrath says even before taking this role, Williams “has been one of the quiet voices at the Fed pushing for the move”
FOMC statement, 13 December 2011
Go back to watching Mario. See you in 2012.
– FOMC statement, 13 December 2011
Not quite, of course, but as expected, there’s nothing to see in the December FOMC statement. Rates remain the same and Twist continues.
At home with Ben
We’ve marvelled many times at Jon Hilsenrath’s extraordinary ability to mind meld with the most powerful man in global finance — Ben Bernanke (in case you were wondering).
How else to explain the string of scoops explaining the Fed’s thinking in the lead up to crucial FOMC meetings or get-togethers at Jackson Hole.
Bloomberg vs Bernanke
How did it come to this?
1. Bloomberg News spent a couple of years trying to extract more information about the bank bail-out loans than the Fed wanted to share.
2. Bloomberg ran this story based on the data it obtained,
The Fed hath spoken
The Fed has been talking for some time about, er, how it talks. And writes.
According to Fedwire, a move to more explicit communication of the central bank’s long-term goals looks like being finalised early next year — and it could be quite explicit indeed:
Central bankers: pursued by a bear
That is US and UK central bankers pursued by über bear Albert Edwards of Société Générale.
Edwards is rather peeved that researchers at the Federal Reserve seem to have concluded that the Fed wasn’t responsible for the housing boom that has turned into the biggest bust since the 1930s.
The trouble with seigniorage
Gavin Davies asks a good question on his FT blog: Does the ECB really have a silver bullet?
An increasing number of market participants want to believe it does, and some have even convinced themselves that the ECB will pull the trigger on unsterilised bond buying,
Bernanke could do better
Having floated the idea that the Federal Reserve should target a nominal level of GDP, Goldman’s top economist Jan Hatzius is none too pleased that Ben Bernanke shot the suggestion down in Wednesday’s post FOMC presser.
US Markets Live: Bernanke saves the world edition
And by “Saves the World” we mean “Thanks the stars that he’s not Mario Draghi”.
We’re kicking off at 2:05pm in New York (6:05pm in London), ten minutes before we find out that Ben is late and wait another ten minutes the presser is scheduled to begin.
Understanding your central banker
If you can tell a little about someone from the books they read, you can tell a lot about them from the books they write, especially if they’re a central banker.
Morgan Stanley economist Spyros Andreopoulos has dipped into the library at the “Global Central Bank” and draws comfort from the number of “depression economics”
Another reason the Fed might buy MBS
If you’ve been following reports of what might happen at next week’s FOMC’s meeting, you probably know that the Fed is contemplating further purchases of agency mortgage-backed securities.
And there are least two,
Breaking on FedWire…
This is getting ridiculous.
At this rate there won’t be any point logging on to read the FOMC minutes on Wednesday evening. FedWire, the unofficial/official news service of the Federal Reserve, has done such a comprehensive briefing the market on what to expect that there can’t possibly be any surprises…
Goldman says let’s Twist again
Found.
Someone who thinks a change in the composition of the Federal Reserve’s balance sheet (a new Operation Twist) would be a good idea.
Guess who? (Obviously it’s not Bill Gross).
Give up?
OK then,
Bernanke sets the stage for…
… some sort of easing, again.
He had already set it at Jackson Hole and the August 9 FOMC, and mostly confirmed by the minutes of that meeting.
He didn’t add much in today’s speech: no new details on potential upcoming policy changes such as Operation Twist or anything else you may have heard via Fedwire.
Goldman’s Q(E3)&A
There was no press conference with Ben Bernanke after the August 9 FOMC statement or following his Jackson Hole speech — and there won’t be another until after Congress pays attention and starts pulling its weight around here November 2.
El-Erian: Interpreting Bernanke’s Jackson Hole speech
Mohamed El-Erian, chief executive and co-chief investment officer at PIMCO, responds to the Federal Reserve chairman’s speech at the Jackson Hole conference.
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Chairman Bernanke’s Jackson Hole speech,
Jedi Economics
If Paul Krugman (and others) are right, classical monetary policy goes out the window in a world where nominal interest rates are zero bound. All the usual monetary tools at the disposal of central bankers just don’t work.
The Fed dissenters
So now we know why FOMC members Fischer and Plosser voted against Bernanke’s “on hold till ’13″ policy.
From Bloomberg:
Philadelphia Fed President Charles Plosser said in an interview yesterday that taking action after stocks tumbled “signaled that we are in the business of supporting the stock market.” Richard Fisher,
When a government bond becomes a Giffen good
So, Swiss short-term market rates are now fully negative:
But it’s not just short-term rates. As of Thursday anyone holding two-year or three-year Swiss bonds is apparently demanding that the price exceeds the coupon-included return in order to be tempted to sell.
Twisting the Twist
Confused by the late, powerful rally on Wall Street overnight, that saw the Dow Jones Industrial close up 4 per cent?
Don’t be.
On one level, Federal Reserve chairman Ben Bernanke is targeting the stock market with the deliberately ambiguous statement that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013″.
FOMC statement – 9 August 2011
It’s here! We’re saved!
Wait a minute….
The full FOMC statement for August 9 is pasted below for your reading pleasure.
It’s more QE2.0 than QE3.
There are two key changes.
First, the Fed has given a semi-specific date for the continuation of the federal funds rate at “exceptionally low levels”.
Risk on… wait, never mind
Remember when risk assets bounced on Bernanke’s testimony suggesting that QE3 was now under more serious consideration within the FOMC?
That was at 10am EST on Wednesday, but then the rally lost its legs.
Search for the proverbial one-armed economist continues
On the one hand…
…the possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support.
Bernanke has other ways of acting
All this debate about whether or not we will see another round of quantitative easing in the US, and yet, in his latest comments, Ben Bernanke has hinted more strongly than ever that if the Fed does act it might do so in a very different manner.
Koo and Gross on what Bernanke will do next
Apologies for the public school levels of surname chicanery in the title but a couple of big hitters have weighed in before the Fed Chairman’s special appearance on US Markets Live on Wednesday.
Richard Koo, chief economist at Nomura Research Institute and analyst-in-chief of “balance sheet recessions”,
FOMC preview: countdown to more of the same, probably
We plan to pummel you with unrelenting promotion remind you once or twice more before Wednesday, but we’ll be hosting a Markets Live session during Bernanke’s press conference after the FOMC meeting.
Despite the many obvious signs of slowing growth since the FOMC last met in April,