econbrowser.com - 12/16/2008
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Today's announcement from the Federal Reserve marks the end of the road for Plan A (fighting the recession by lowering interest rates), and the beginning of ... what?
The Fed's announcement begins :
The Federal Open Market Committee decided today to establish a target range for the ...
federalreserve.gov - 12/16/2008
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federalreserve.gov —
Release Date: December 16, 2008 For immediate release
The Federal Open Market Committee decided today to establish...
a target range for the federal funds rate of 0 to 1/4 percent. Since the Committee's last meeting, labor market conditions have ...
(more)
FRB: Press Release--FOMC statement--December 16, 2008
econbrowser.com - 12/22/2008
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econbrowser.com —
Here I survey how we got here, where
things currently stand, and what it all means. Let...
me begin by reviewing some first principles of what the Fed is all about. How did the cash currently in your wallet get there? You withdrew it from an ATM, ...
(more)
Federal Reserve balance sheet
gregmankiw.blogspot.com - 12/17/2008
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gregmankiw.blogspot.com —
With the Fed having cut interest rates today
to a target range of 0 to 1/4 percent,...
many people will be asking whether the central bank has run out of ammunition. A good question. Obviously, the next step is not going to be further cuts in the federal ...
(more)
The Next Round of Ammunition
Comments
Blog Reactions
I Believe in Quantitative Easing
EconLog: Library of Economics and Liberty —
James Hamilton writes , Will [purchases of mortgage securities and other assets by the Fed] succeed if we just do it on a sufficiently large scale? I'm not at all convinced that it would. Our standard finance models treat interest rate spreads as governed primarily by fundamentals such as default risk and only secondarily by the volume of buyers or sellers. Oh, please. "Our standard finance models" have absolutely nothing to say about crazy de-leveraging. If those models worked, we wouldn't be where we are now. If the Fed ...
links for 2008-12-17
Economist's View —
Quantitative easing - Econbrowser
Even More Stimulus Plans - Economix
"The science isn't there..." - Free exchange
Dark Energy Stunts Galaxies’ Growth - NYTimes.com
Finding Good News in Prices - NYTimes.com
Defeating Bedlam - Olivia Judson
‘Helicopter Ben’ confronts the challenge of a lifetime - Martin Wolf
The Education of Robert Samuelson - Beat the Press
The Fed Speaks: More on Today's Decision - ...
Trepidation About Quantitative Easing, Version 2.0
naked capitalism —
... extends through the end of 2009, although it is widely assumed it will be renewed, plus Fannie and Freddie are NOT full faith and credit obligations of the US (the Treasury has instead entered into a "no negative net worth" guarantee. The differences may seem semantic, but they are seen as serious in some quarters. If that is the real issue, more Fed buying will not entice the key buyers, central banks, back into the pool. Jim Hamilton is also doubtful, and suggests that the Fed is working at cross purposes: Will that strategy succeed if we just do ...
Wednesday links: absence of arbitrage
Abnormal Returns —
... Risk)
The Fed wants to start pushing on long term lending rates. (Real Time Economics)
What is the Feds’ end game here? (Curious Capitalist)
“Even if the Fed cannot reduce nominal interest rates, it can reduce real interest rates by committing to a modest amount of inflation.” (Mankiw Blog also Econbrowser)
Research shows that macroeconomic and stock market ...
Economists cursing out economists
InvivoAnalytics.com —
... works has to either be repaid or written off. If either is inhibited by reflation or regulatory forbearance, then a cost is imposed on productive works, whether through inflation, higher interest, diversion of consumption, or taxation to socialise losses. Over time that cost ultimately hollows out the real productive economy leaving only bubble assets standing. Without a productive foundation, as reflation and forbearance reach their limits, those bubble assets must deflate. James Hamilton: Quantitative Easing But while the Fed may have little control over the spreads between ...
Related: quantitative easing+federal reserve
The purpose of quantitative easing —
SCSUScholars
The Fed is lending on terms that private banks are not willing to offer. They are not searching for underpriced "bargains" on behalf of the public, nor is it their mission to do so. Their mission is to provide liquidity to the system by acting as lender-of-last-resort. We don't care about the ...
How much money can the Fed create? —
BloggingStocks
The U.S. Federal Reserve is reaching into its 'new tool box' to use quantitative easing to help jump-start the U.S. economy from it worst recession in decades, and it begs the question: is there a limit to amount of money the Fed can create? "That depends," economist David H. Wang told ...
Fed Shoots for Target Range —
Minyanville
The Federal Reserve has taken interest rates to 0. They've clearly started a program of quantitative easing but what exactly does that mean? Is the Fed pushing on a string as Japan has done for almost two decades? The quick answer is no but that doesn't tell us much. We may not be in for a ...
Ben is 'all in' —
BloggingStocks
Federal Reserve Chairman, Ben Bernake the poker player, went "all in" yesterday . Whether or not he wins, the pot remains to be seen. He lowered interest rates to just about zero and embarked on a new venture, which he calls "quantitative easing." This is a fancy rhetoric for the Federal ...
Zero Interest Rate Policy officially arrives —
The Mess That Greenspan Made
The Federal Reserve slashed their target short-term lending rate to a range of 0.0 percent to 0.25 percent and signaled the beginning of an era of "quantitative easing" where the central bank will buy a wide variety of assets to support the struggling U.S. economy. Just 15 months into the ...
'New tool box' likely to be focus of Fed's meeting —
BloggingStocks
What should investors focus on when the U.S. Federal Reserve announces its interest rate decision Tuesday at 2:15 p.m. EST? The amount of the cut in short-term interest rates? No. A rate cut in its benchmark rate of 50-75 basis points from 1% is all but assured, given the recession. The Fed's ...
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