federal reserve

Federal Reserve Dilemma Suggests Higher Inflation

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Reading Time: 5 minutes The economy looks like it has momentum as of the beginning of 2018 based on most indicators. For example, retail sales growth was 5.4% in December and 4.2% for all of 2017 which was up from the 3.2% growth in 2016. However, retail sales in January declined 0.3% compared with…CONTINUE READING

How Will Markets React To Central Bank Tapering In 2018?

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Reading Time: 5 minutes 2018 is expected to be the year of tighter central bank policies through shrinking balance sheets and rate hikes. It’s going to be interesting to see how central bank policies affect equity markets and the economy. The Fed’s QE policy is monetary stimulus, but most critics claim it just pumps…CONTINUE READING

Tax Cuts: Short-Term & Long-Term Review

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Reading Time: 5 minutes Throughout the expansion from about 2010 to 2016 the Federal Reserve told us it wanted to step back from its stimulative policies, which were QE and zero percent interest rates, but it couldn’t because fiscal stimulus wasn’t coming. Furthermore, there have been times in that period where fiscal policy hurt…CONTINUE READING

Does Technological Improvement Hurt Productivity?

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Reading Time: 5 minutes The Minnesota Fed President Neel Kashkari is active on Twitter where he often conducts Q&As where any user can ask him questions. While we aren’t proponents of the Federal Reserve, the fact that he is willing to answer real critics and not just the media, which oftentimes asks what seems…CONTINUE READING

The Federal Reserve Wants You To Own Gold

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Reading Time: 5 minutes At the time the Federal Reserve was doing its 3 rounds of QE and had a zero percent Fed funds rate, there were predictions by bearish investors and Austrian economists that inflation would run out of control. This hasn’t happened as inflation, measured by Core PCE or CPI, has stayed…CONTINUE READING

Are Too Big To Fail Banks Safe?

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Reading Time: 4 minutes Too Big To Fail Definition The definition of the term “too big to fail” refers to a company that poses negative systemic risk to the entire economy in the event of failure. Thus far no firm designated as too big to fail has failed, therefore this is a theory, one…CONTINUE READING

Why Isn’t The Federal Reserve Audited?

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Reading Time: 5 minutes Senator Rand Paul’s ideas have been gaining traction, probably because he is much more pragmatic than his father, Ron Paul. Rand sees what each side wants in a negotiation and finds a suitable solution that all parties can agree on. His ideas for the framework of healthcare legislation would have…CONTINUE READING

John Taylor Disagrees With His “Taylor Rule”?

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Reading Time: 5 minutes Trump’s decision for Fed chair will be made sometime this fall. We’ve already discussed Powell and Warsh who are the front runners. In this article, we will take a look at John Taylor because he was interviewed by the President. John Taylor is a reformer much like Kevin Warsh. Powell is…CONTINUE READING

How The Federal Reserve Decides Policy

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Reading Time: 4 minutes The Federal Reserve has a dual mandate to form an economic environment which keeps prices stable and has maximum stable employment. The Dual Mandate Bullseye chart does a great job of showing the policy objective the Fed has. As you can see, the x axis has an unemployment gauge and the…CONTINUE READING

Is Powell The Next Federal Reserve Chairman?

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Reading Time: 5 minutes President Trump will decide on who the next Fed chairperson will be sometime in between late October and early November. The unusual aspect of this decision is the only person who knows who Trump will pick is himself. This aspect has shown up lately as Jerome Powell has become the…CONTINUE READING

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