Föhrenbergkreis Finanzwirtschaft

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Posts Tagged ‘Fed’

Economists and central bankers unite in grumbling about Donald Trump

Posted by hkarner - 30. August 2019

Date: 27-08-2019
Source: The Economist Free exchange

But in some ways, the president brought them together at their yearly gathering

AS THE ANNUAL meeting of central bankers and economists at Jackson Hole, a mountain resort in Wyoming, began on August 23, two participants made a bet. Would President Donald Trump tweet about the opening remarks of Jerome Powell, the chairman of the Federal Reserve, within 45 minutes of their publication? In the event, it took the president 57 minutes. That night the victor enjoyed his winnings—a glass of whiskey—in the bar.

Mr Trump’s words made the conference theme, “challenges for monetary policy”, uncomfortably timely. He called Mr Powell anenemy and promised to ramp up trade tensions with China further. Later that day he announced increases in tariff rates on over $500bn of Chinese imports. But even as stockmarkets reeled, the conference continued serenely. Indeed, Mr Trump even brought the participants together.

Most obviously, they were united in grumbling about the effects of his trade policy on the global economy. Philip Lowe, the governor of the Reserve Bank of Australia, said that business uncertainty was turning political shocks into economic ones. Mark Carney, the governor of the Bank of England, said that trade tensions had raised risk premiums, tightening financial conditions. Den Rest des Beitrags lesen »

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How not to weaken central banks’ independence

Posted by hkarner - 13. April 2019

Date: 11-04-2019
Source: The Economist: Free exchange

Why Stephen Moore and Herman Cain are poor picks for the Fed

There are more than a few echoes of the Nixon era in the presidency of Donald Trump. Monetary reverberations are among them. Facing re-election in 1972, Richard Nixon felt he needed a strong economy at his back, and made a habit of haranguing Arthur Burns, the chairman of the Federal Reserve at the time. Burns recounted the meetings in his diaries: “The president looked wild; talked like a desperate man; fulminated with hatred against the press; took some of us to task…” Historians reckon Burns was too accommodating of Nixon’s demands, and so helped launch the inflation of the 1970s. Mr Trump is now waging his own assault on the Fed’s independence. He has repeatedly complained about the central bank’s decisions and urged it to take a more doveish stance.

More strikingly Mr Trump, who has already chosen three of the five sitting members of the Fed’s board of governors, has named Stephen Moore and Herman Cain to fill the remaining two vacancies. In contrast to candidates who have come before, both are political activists. But the parallel with the 1970s is less apt than it seems. There are different ways to politicise monetary policy, and Mr Trump’s is particularly poisonous. Den Rest des Beitrags lesen »

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And we are still stuck with Trump and that is far worse!

Posted by hkarner - 4. April 2019

Date: 03-04-2019
Source: The Wall Street Journal

Subject: Trump to Fed Chairman Powell: ‘I Guess I’m Stuck With You’

The president blasted the central bank and its leader at three meetings in the past week alone

Federal Reserve Chairman Jerome Powell on Capitol Hill in Washington in February.

WASHINGTON—President Trump is blaming the Federal Reserve for holding back the economy and stock market despite the central bank’s recent decision to do two things he wanted—halt rate increases and stop shrinking its asset portfolio.

The president blasted the Fed and Chairman Jerome Powell at three meetings in the past week alone, telling Republican senators, supporters and staffers that if it wasn’t for the central bank’s past rate increases, economic output and stocks would be higher and the U.S. budget deficit would be rising less. Den Rest des Beitrags lesen »

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Federal Reserve: Ohne permanente Interventionen kommt der Crash

Posted by hkarner - 30. März 2019

Dank an H.G.!

Deutsche Wirtschafts Nachrichten | Veröffentlicht: 21.03.19 09:44 Uhr

Die Federal Reserve bricht die Normalisierung ihrer Geldpolitik ab. Das marode Finanzsystem kann offenbar keine dauerhaft steigenden Zinsen mehr vertragen. Für die Weltwirtschaft sind schwere Zeiten angebrochen.

Angesichts der unsicheren Konjunkturaussichten will die US-Notenbank Fed dieses Jahr die Füße stillhalten und die Ära der schrittweisen Zinserhöhungen beenden. Die Währungshüter um Fed-Chef Jerome Powell planen nach neun Erhöhungen binnen drei Jahren für 2019 eine Pause, wie sie am Mittwoch signalisierten. Erst 2020 könnte noch eine Anhebung kommen.

Der Leitzins ist nun in der Spanne von 2,25 bis 2,5 Prozent in etwa auf einem Niveau, das die Wirtschaft laut Powell weder anschiebt noch bremst. „Jetzt ist eine großartige Zeit, um geduldig zu sein“, betonte er. Aus den Konjunkturdaten lasse sich kein Grund ableiten, Zinsen zu erhöhen oder zu senken.

Die Entscheidung der Zentralbank hat massive Auswirkungen. Praktisch gesteht sie damit ein, dass die Weltwirtschaft vor schwierigen Zeiten steht und eine Rezession nicht mehr ausgeschlossen ist. Es ist außerdem ein Eingeständnis, dass das auf Schuldgeld basierende Finanzsystem nicht mehr ohne dauerhafte Eingriffe durch die Zentralbanken bestehen kann. Den Rest des Beitrags lesen »

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Understanding the Fed’s Dovish Turn

Posted by hkarner - 19. März 2019

Nouriel Roubini, a professor at NYU’s Stern School of Business and CEO of Roubini Macro Associates, was Senior Economist for International Affairs in the White House’s Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.

Over the past few years, the US Federal Reserve has been ahead of other major central banks in normalizing monetary policy. But now the Fed has abruptly put further interest-rate hikes on hold, owing to key changes in macroeconomic conditions and the political environment.

NEW YORK – The US Federal Reserve surprised markets recently with a large and unexpected policy change. When the Federal Open Market Committee (FOMC) met in December 2018, it hiked the Fed’s policy rate to 2.25-2.5%, and signaled that it would raise the benchmark rate another three times, to 3%-3.25%, before stopping. It also signaled that it would continue to unwind its balance sheet of Treasury bonds and mortgage-backed securities indefinitely, by up to $50 billion per month.

But just six weeks later, at the FOMC meeting in late January, the Fed indicated that it would pause its rate hikes for the foreseeable future and suspend its balance-sheet unwinding sometime this year. Den Rest des Beitrags lesen »

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The Fed Is Playing a Dangerous Game

Posted by hkarner - 4. März 2019

By John Mauldin, March 1, 2019

Infested with Crawdads
Not Applauding
Steadily More Dovish
#3 Mandate

In an ideal world, we wouldn’t have to read the Federal Reserve’s rabbit entrails to discern the economy. But Since the Fed exists in the real world, and its decisions matter, we have to pay attention.

Just so new and perhaps even old readers know my views on the Fed: I believe we need it to handle the practical matters of the banking system plus interact with other international central banks (we live in a complicated world) and, in the midst of crisis, act as a lender of last resort and liquidity provider. I agree with Walter Bagehot’s (pronounced badget) very important pronouncement (often called „Bagehot’s Dictum“) that “in times of financial crisis central banks should lend freely to solvent depository institutions, yet only against sound collateral and at interest rates high enough to dissuade those borrowers that are not genuinely in need.” That rule or dictum remains wise. Den Rest des Beitrags lesen »

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Ein wirtschaftlich durchwachsenes Jahr 2019

Posted by hkarner - 11. Februar 2019

 

Nouriel Roubini, a professor at NYU’s Stern School of Business and CEO of Roubini Macro Associates, was Senior Economist for International Affairs in the White House’s Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.

NEW YORK – Auf das synchronisierte globale Wirtschaftswachstum von 2017 folgte das asynchrone Wachstum des Jahres 2018, in dem, von den USA abgesehen, in den meisten Ländern Konjunkturabschwünge einsetzten. Sorgen über die US-Inflation, den geldpolitischen Kurs der US Federal Reserve, anhaltende Handelskriege, Italiens Haushalts- und Schuldenprobleme, den Konjunkturabschwung in China und die Anfälligkeiten der Schwellenmärkte führten am Jahresende zu steilen Kursrückgängen an den weltweiten Aktienmärkten.

Die gute Nachricht zu Beginn des Jahres 2019 ist, dass das Risiko einer unmittelbaren globalen Rezession niedrig ist. Die schlechte Nachricht ist, dass wir auf ein Jahr des synchronisierten globalen Abschwungs zusteuern; das Wirtschaftswachstum wird in den meisten Regionen in Richtung seines Potentials fallen und dieses in einigen Fällen noch unterschreiten. Den Rest des Beitrags lesen »

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Why Is the Fed Still Raising Interest Rates?

Posted by hkarner - 30. Dezember 2018

Martin Feldstein, Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research, chaired President Ronald Reagan’s Council of Economic Advisers from 1982 to 1984. In 2006, he was appointed to President Bush’s Foreign Intelligence Advisory Board, and, in 2009, was appointed to President Obama’s Economic Recovery Advisory Board. Currently, he is on the board of directors of the Council on Foreign Relations, the Trilateral Commission, and the Group of 30, a non-profit, international body that seeks greater understanding of global economic issues.

Given that the US Federal Reserve has long said that its interest-rate policy is “data dependent,” why has it pressed ahead with monetary tightening in the face of worsening economic indicators? Three reasons stand out.

CAMBRIDGE – Earlier this month, the US Federal Reserve’s policy-setting Federal Open Market Committee (FOMC) voted unanimously to increase the short-term interest rate by a quarter of a percentage point, taking it from 2.25% to 2.5%. This was the fourth increase in 12 months, a sequence that had been projected a year ago, and the FOMC members also indicated that there would be two more quarter-point increases in 2019. The announcement soon met with widespread disapproval. Den Rest des Beitrags lesen »

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As Market Rout Continues, Trump Stands Firm on Fed, Border Wall

Posted by hkarner - 27. Dezember 2018

Date: 26-12-2018
Source: The Wall Street Journal

President criticizes central bank’s rate increases, extends stalemate over border-wall funding; aides consider meeting with Powell

President Trump criticized Federal Reserve interest-rate increases and said on Tuesday a partial U.S. government shutdown wouldn’t end until Congress funded a wall along the border with Mexico, holding firm on his policy stances against the backdrop of a global economic slowdown and an extended world-wide stock plunge.

Japan’s Nikkei Stock Average fell 5% and into a bear market on Tuesday, following a 3% fall in U.S. stocks on Monday, the worst Christmas Eve trading day in history.

Mr. Trump, speaking in the Oval Office on Christmas Day, said the Federal Reserve is “raising interest rates too fast”—a practice he blames for volatile U.S. indexes. Den Rest des Beitrags lesen »

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Trump lässt kein gutes Haar an seinem Notenbankchef

Posted by hkarner - 29. November 2018

US-Präsident Donald Trump teilt schon seit Monaten gegen die Währungshüter aus. „Bisher bin ich mit meiner Wahl von Jay noch nicht mal ein kleines bisschen glücklich“, sagt er jetzt.

Präsident Donald Trump verstärkt den Druck auf die US-Notenbank Fed mit einer neuen Welle von Vorwürfen. In einem Zeitungsinterview bekräftigte er seine Kritik an dem von ihm selbst ins Amt gehievten Fed-Chef Jerome Powell. Trump hält diesem vor, mit Zinserhöhungen der amerikanischen Wirtschaft zu schaden. „Ich mache Deals, und ich erhalte keine Unterstützung der Fed“, sagte der Präsident der „Washington Post“. Die Notenbank mache einen Fehler. Das sage ihm sein Bauchgefühl. „Mein Bauch sagt mir manchmal mehr, als das Gehirn von jedem anderen mir sagen könnte.“

Angesichts der boomenden Wirtschaft erhöht die Fed derzeit schrittweise die Zinsen, um die Inflation in Schach zu halten. Damit will sie ihr Mandat erfüllen, Vollbeschäftigung und stabile Preise zu befördern. Sie untersteht nicht der Regierung. Powell hat angesichts der mehrfachen Attacken Trumps die Unabhängigkeit der Fed unterstrichen. Nach der jüngsten Zinsanhebung Ende September sagte er, bei geldpolitischen Entscheidungen spielten „politische Faktoren oder ähnliches“ keine Rolle. Den Rest des Beitrags lesen »

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