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Thoughts From The Divide - Archive

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Posts tagged Federal Reserve
Uncertainty - October 28, 2019

The Dallas Fed’s latest Manufacturing Survey results indicate more optimism, though the respondents saw “a lot of uncertainty”. The Conference Boards Consumer Survey showed consumers have dimming expectations, but “there are no indications” holiday spending will be hurt. Jamie Dimon and others may trumpet the strength of the U.S. consumer, but banks are building their buffers against delinquent consumer loans.

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Liquidity and Labor - October 1, 2019

Zoltan Pozsar of Credit Suisse warned of potential problems in the dollar funding market before the Fed began its repo operations and is concerned that it needs to deliver deep rate cuts or potentially face “a fresh liquidity crisis”. Sylvain Leduc and Zheng Liu from the San Francisco Fed study the effects of automation on the labor share, concluding it has weakened “workers’ bargaining power”. Jonathan Tepper looks at workers and wages from a broader perspective in an oldie but goodie covering everything from mergers to CEO pay.

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Economic Curves and U-Turns - August 27, 2019

The 2s-10s curve his back on the radar as it inverted before the latest Trump tweets and Jackson Hole, but research from the NY Fed finds the 10year - 3month spread to be a netter recession predictor. Larry Summers, the San Francisco Fed, and Bill Dudley all surprised us this week as they made U-turns from their precious positions on various economic topics including QE, negative rates, and Fed independence.

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Monetary Policy Pushback - July 30, 2019

Ruchir Sharma, Chief Global Strategist at Morgan Stanley reminds us that central banks can’t dictate where the money they print goes, and warns that easy money could set the stage for a market collapse. D.L. Thornton, ex-Vice President of the St. Louis Fed argues that low rates have failed to spur economic growth and have harmed sectors of the population.

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Fed Froth and Leveraged Loans - July 23, 2019

We take a look at mixed regional Fed data with their positive future outlook and the Bank of England’s concerning look into leveraged loans.

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Freight's Perspective and Asset Purchases - July 16, 2019

We review the Cass Freight Index is “signaling economic contraction” as indicators across sectors and geographic flash warning signs. and James Hamilton of UC San Diego warns that one of the unconventional tools that Powell and other central bankers rely on is less effective than its users believe.

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Know Thy Nominee - July 8, 2019

Judy Shelton and Christopher Waller’s nomination to the Federal Reserve board leads us to dig into their pasts for clues to their policy views. Christine Lagarde is also a newly minted nominee, up for the presidency of the ECB, and though she is not an economist, has spent some time in the monetary policy trenches.

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Unconstrained Negative Interest Rates - June 4, 2019

In “The Case for Implementing Negative Interest Rate Policy” Kenneth Rogoff & Andrew Lilley probe the limitations of monetary policy tools and examine the steps necessary to implement deeply negative interest rate policy.

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SBOI, Inflation and the Fed - February 12, 2019

The NFIB released its Small Business Optimism Index and, while the press was quick to comment on the weakness of the data, the numbers were not all bad. Research suggests that recent inflationary pressures are something to shrug off and allowing inflation to run hot could have helped reduce economic slack.

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