Tag: Federal Reserve

Posted on

Unless Elizabeth Warren can persuade Joe Biden to fire Jerome Powell, the Chair is going nowhere …

Senator Elizabeth Warren, Democrat of Massachusetts, lit in, as usual, to Jerome Powell, chairman of the Board of Governors of the Federal Reserve System. Mrs Warren shared today on “Meet the Press” her dissatisfaction with Mr Powell’s handling of bank regulation in the wake of three bank failures: Silvergate Bank, Silicon Valley Bank, and Signature … Continue reading Unless Elizabeth Warren can persuade Joe Biden to fire Jerome Powell, the Chair is going nowhere …

Posted on

There is no such thing as “moral hazard” surrounding this bank bailout.

What the “moral hazard” critics overlook is the economic impact on those of us who rely primarily on wages to get by. Hiccups in the current monetary and financial system in the immediate term that change the wage earners standard of living have a greater detrimental impact versus those individuals buttressed by the ownership of claims on income. While it behooves the wage earner to reduce his or her exposure to the current monetary and financial system, the short-term bandage on this injury should be applied. The wage earner should bear in mind that this fix is short-term and that it is up to us to seek out a longer-term solution. Continue reading There is no such thing as “moral hazard” surrounding this bank bailout.

Posted on

Interbank Market News Scan:  Does the State have an interest in sustaining SVB Financial? No.

Michael S. Barr, Vice-chair of the Board of Governors of the Federal Reserve System, warned the U.S. earlier this week that banks should take a careful and cautious approach to engaging in crypto-asset related activities.  Banks need to determine whether their crypto-related activities are “legally permissible” before engaging in them.  Mr Barr, who is responsible … Continue reading Interbank Market News Scan:  Does the State have an interest in sustaining SVB Financial? No.

Posted on

Interbank Market News Scan: All quiet on the Federal Reserve front …

The media is saying this …. The Chicago Mercantile Exchange’s FedWatch tool has done a 180 degree turn from its 9 February 2023 consensus that the Board of Governors of the Federal Reserve System would only increase its fed funds target range by 25-basis points.  The CME forecast a .908 probability of the Fed targeting … Continue reading Interbank Market News Scan: All quiet on the Federal Reserve front …

Posted on

Interbank Market News Scan: Hours away from Powell’s testimony, the Fed should do a one and done with the fed funds rate.

While I believe that the FOMC will vote to raise rates, how much the rates increase by will be a decision driven by politics as it is by economics. The United States is entering the silly season of campaigning that runs up to the 2024 presidential election. As the expenditures stemming from President Biden’s infrastructure spending and financial support for Ukraine seep through the economy, the last thing the Administration wants to contend with is increased financial stress on American households. Mr Biden would prefer to see the Federal Reserve bring a pause to the inflation fight by the end of this spring, putting the pain into the past as soon as possible while crafting a narrative that places the full blame for inflation on the central bank. Continue reading Interbank Market News Scan: Hours away from Powell’s testimony, the Fed should do a one and done with the fed funds rate.

Posted on

Joe Biden’s reflection on the US economy glosses over banks

So far, the Administration has given me no reason to believe that it has an innovative game plan for managing taxpayers facing a 2023 recession. In particular, as the number of taxpayers see a supply of jobs offered begin falling and/or offered wages start to fall, the Biden administration, if it is to stay politically viable, will have to provide the unemployed with answers, answers the taxpayer may not like. Continue reading Joe Biden’s reflection on the US economy glosses over banks