As I discussed briefly yesterday, Treasury has announced plans to revitalize its Supplementary Financing Program (SFP), which will effectively mop up $200 billion in excess reserves over the next two months. Even though this is a Treasury action, it strikes me as an important step (with many yet to come) in the Fed’s exit strategy. [...]
Posts Tagged ‘Federal Reserve’
The Fed and the Supplementary Financing Program
Posted in Macroeconomics, tagged Federal Reserve, Macroeconomics on February 24, 2010 | Leave a Comment »
Step Three of the Fed’s Exit Strategy
Posted in Macroeconomics, tagged Federal Reserve, Macroeconomics on February 23, 2010 | 4 Comments »
As Confucius Lao Tzu once said, a journey of a thousand miles begins with a single step. The Fed faces just such a journey today: returning monetary policy to normal as the economy heals. And in case you didn’t notice, the Fed has already taken three steps down the road. Step 1 was the termination [...]
Federal Reserve Earns $46 Billion for Taxpayers
Posted in Budget, Finance, Macroeconomics, tagged Budget, Federal Reserve, Finance on January 12, 2010 | 2 Comments »
The Federal Reserve system is doing its part to cut the budget deficit (at least for now). Treasury will receive $46.1 billion of profits from the Federal Reserve profits for fiscal 2009. That’s about a third higher than the amount remitted for 2008. According to the Fed’s news release this morning, the following items drove profits: [...]
Talking about TARP and Chairman Bernanke
Posted in Budget, Economy, Finance, Macroeconomics, Politics, tagged Bernanke, Federal Reserve, TARP on December 17, 2009 | Leave a Comment »
The Business News Network of Canada interviewed me yesterday about TARP and Fed Chairman Bernanke’s “Person of the Year” award from Time Magazine. Here’s a link to the video of the interview. Going in, I was focused on the following talking points: Within current budget rules, the Congress can indeed use unspent TARP money to [...]
Fed Chairman Bernanke Submits 70 Answers to His Take-Home Exam
Posted in Economy, Finance, Macroeconomics, Politics, tagged Federal Reserve, Lehman on December 15, 2009 | 1 Comment »
A few weeks ago, Fed Chairman Ben Bernanke appeared before the Senate Banking Committee for his confirmation hearing. Following the normal ritual, Committee members made their statements and peppered Bernanke with questions about every economic topic under the sun. That much is well-known (and was closely followed on CNBC). What’s less well-known is that Bernanke [...]
Defending the Fed’s Independence, Part II
Posted in Macroeconomics, tagged Federal Reserve on November 10, 2009 | 3 Comments »
Back in July, I expressed concern that Congress might undermine a key pillar of U.S. economic policy: the independence of the Federal Reserve. Why is that so important? Because independent central banks do a better job of controlling inflation. Inflation may not be an immediate threat to the U.S. economy, but as that day approaches, [...]
Wall Street Goes to Washington
Posted in Economy, Finance, Politics, Regulation, Uncategorized, tagged Banks, Economics, Fannie Mae, FDIC, Federal Reserve, Finance, Freddie Mac, J.P. Morgan, Lehman, Pimco, Politics, Regulation, TARP on September 13, 2009 | 2 Comments »
A front page story in today’s Washington Post (“In Shift, Wall Street Goes to Washington“) documents the Capital’s rising importance in the financial world: J.P. Morgan Chase for the first time convened its board in Washington this summer, calling the directors to a meeting at the downtown Hay-Adams hotel, then dispatching them to Capitol Hill [...]
President Obama Makes A Great Decision
Posted in Economy, Macroeconomics, Politics, tagged Bernanke, Federal Reserve on August 24, 2009 | 7 Comments »
David Wessel of the Wall Street Journal reports that President Obama will re-appoint Ben Bernanke as Chairman of the Federal Reserve. Excellent decision. P.S. Don’t let this good news distract you from the much-less-good economic news on Tuesday: CBO and OMB are releasing new budget projections that will show trillions upon trillions of coming deficits.
Inflation, Bank Reserves, and Lending
Posted in Economy, Finance, Macroeconomics, tagged Banks, Federal Reserve, Finance, Interest Rates, Macroeconomics on August 12, 2009 | 6 Comments »
The Business News Network in Canada interviewed me last week about the gigantic amount of excess reserves being held by U.S. banks. Here’s a link to the video of the interview. (We had a small technical glitch at the start, but then got rolling.) Going into the interview, I was focused on the following talking [...]
Why Are Banks Holding So Many Excess Reserves?
Posted in Economy, Finance, Macroeconomics, tagged Banks, Federal Reserve, Finance, Interest, Macroeconomics on July 29, 2009 | 8 Comments »
That’s the question posed by a recent staff report from Todd Keister and James McAndrews at the New York Federal Reserve. Their answer? Because the Federal Reserve has been really, really busy. Keister and McAndrews begin their analysis by documenting the remarkable increase in excess reserves since the fall of Lehman: Since September 2008, the [...]
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