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Tag Archives: fed funds

The Fed Continues To Make Policy Mistakes

“During the last year, the Federal Reserve has hinted that the period of ‘ultra-accommodative monetary policy’ was coming to an end. The Fed started that process last October by terminating the latest ‘Quantitative Easing’ program, which induced massive amounts of liquidity into the financial markets. Subsequently, the Fed has turned its focus towards the near ZERO level of the ‘Fed Funds’ rate.” – July 6, 2015 It seems like an eternity ago now, but I warned then the Fed was too late in the...

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Investors Are Grossly Underestimating The Fed – RIA Pro UNLOCKED

 If you think the Fed may only lower rates by .50 or even .75, you may be grossly underestimating them.  The following article was posted for RIA Pro subscribers two weeks ago. For more research like this as well as daily commentary, investment ideas, portfolios, scanning and analysis tools, and our new 401K manager sign up today at RIA Pro and test drive our site for 30 days before being charged. Currently, the December 2019 Fed Funds futures contract implies that the Fed will reduce the...

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Embroiled by Fed Funds, FRBNY 143 Months After BNP Finally Says ‘Offshore’

It was a poignant moment that has gone totally unappreciated. Lost in the noise about subprime mortgages, on August 9, 2007, what actually happened that day represented perhaps the best example of how things worked. Or suddenly didn’t. On the occasion of the 10th anniversary, I recounted the tale of BNP Paribas. You’ve heard of Lehman and Bear Stearns, countless stories about Countrywide and Wachovia. Maybe even something about money market funds. This one French bank’s contributions weren’t...

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Shelton, The Fed, & The Realization Of A Liquidity Trap

Last week, President Trump nominated Judy Shelton to a board seat on the Federal Reserve. Shelton has been garnering a lot of “buzz” because of her outspoken and alternative stances, including “zero interest rates” and a “gold standard” for the U.S. dollar. But, Shelton is full of inconsistent and incongruous views on monetary policy. For instance, in 2017 she stated: “When governments manipulate exchange rates (by changing interest rates) to affect currency markets, they undermine the honest...

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Market Implications For Removing Fed Chair Powell

John Kelly – White House Chief of Staff James Mattis – Secretary of Defense Jeff Sessions – Attorney General Rex Tillerson – Secretary of State Gary Cohn – Chief Economic Advisor Steve Bannon – White House Chief Strategist Anthony Scaramucci – White House Communications Director Reince Priebus – White House Chief of Staff Sean Spicer – White House Press Secretary James Comey – FBI Director “Every week is shark week in the Trump White House,” wrote The Hill contributing author Brad Bannon in...

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Chairman Powell – You’re Fired (Update)

Since President Trump first discussed firing Jerome Powell, out of a sense of frustration that his Fed Chair pick was not dovish enough, he has regularly expressed his displeasure at Powell’s lack of willingness to do whatever it takes to keep the economy booming beyond its potential. Strong economic growth serves Trump well as it boosts the odds of winning a second term. This thought of firing the Fed Chair took an interesting turn yesterday when Mario Draghi, Jerome Powell’s counter-part in...

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Jerome Powell on 60 Minutes: Fact Check

On Sunday, March 11, 2019, Federal Reserve Chairman Jerome Powell was interviewed by Scott Pelley on 60 Minutes. We thought it would be helpful to cite a few sections of their conversation and provide you with prior articles in which we addressed the topics discussed. We have been outspoken about the role of the Fed, their mission and policy actions over the last ten years. We are quick to point out flaws in Fed policy for a couple of reasons. First, is simply due to the enormous...

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What Caused Chairman Powell To Flinch

Clues from the Fed II, an RIA Pro article from November 28, 2018, provided important insight into one of Jerome Powell’s most important speeches as the Federal Reserve Chairman. We share the article to provide context to this article as well as to demonstrate the benefits of subscribing to RIA Pro. Since the latter stages of Chairwoman Janet Yellen’s term and including the beginning of Powell’s term, the Fed has been on monetary policy autopilot. As a result of policy actions taken following...

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Chairman Powell – You’re Fired

“I’m a low interest rate person” – Donald Trump 2016 On Donald Trump’s hit TV show, The Apprentice, contestants competed to be Trump’s chief apprentice. Predictably, each show ended when the field of contestants was narrowed down by the firing of a would-be apprentice. While the show was pure entertainment, we suspect Trump’s management style was on full display. Trump has run private organizations his entire career. Within these organizations, he had a tremendous amount of unilateral...

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Defining Accommodative

Here are two statements from the Federal Reserve’s Federal Open Market Committee (FOMC) immediately following their interest rate decisions of August 1, 2018 and September 26, 2018. August 1, 2018 – In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1.75-2.00%. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2...

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