Surprise! Fed will not taper.
After managing to introduce the additional drag of sharplyhigher interest rates and attendant signs of a housing relapse, by talking, prematurely as it turns out,
about tapering, the Fed cited a ‘tightening of financial conditions’ (that it had caused) as a reason not totaper. The FOMC, it turns out, needs to see ‘more
evidence that progress (on the economy) will be
sustained before adjusting the pace of purchases.’ So much for helpful ‘forward guidance’ from the Fed.”
Yellen up, Summers down.
James Pethokoukis:Obama will no doubt try to put this mess quicklybehind him, nominating Yellen without much delay. . . . Republicans would ask plenty of tough questionsabout the quantitative-easing bond-
buying program that she’s helped oversee and her views on inflation.
It’s hard to imagine Republicans blocking the first female Fed nominee, however, given Yellen’sindisputable qualifications for the job.”
The Fed is facing huge
if not insurmountable
challenges over the next few years. . . . The so-called "taper" is one part of the story. But the bigger story
the one thateveryone seems to be missing
is how the responsibilities of the Fed have exponentially grown under the Dodd-Frank financial reform law.
with Peter Fischer (Blackrock), John Makin (AEI),Stephen Oliner (AEI), and Alex Pollock (AEI).
A debt limit deal?
Chained CPI is bipartisan and fiscally responsible.
Even after adding sensible protectionsfor the poor and the oldest retirees, the president's proposal would cut benefits by $130 billion over thenext decade, while also pulling in $100 billion of extra revenue. The budgetary impact in the followingdecade would likely be three times larger, as the annual reductions continue
d to cumulate.”
Pressure on entitlement reform grows as Social Security deficits double.
Congressional Budget Office released on Tuesday its annual Long Term Budget Outlook. . . . for those
who previously said that there’s no hurry to fix Social Security because the long
-term deficit is small andeasily managed, a near-doubling of that deficit
should cause them to reconsider their positions.”
Five years after the financial crisis
Don’t mention the government’s involvement
With the fifth anniversary of theLehman Brothers collapse, the media have been full of analyses about what happened in those fatefuldays. We hear plenty about Wall Street rapacity but any discussion of the government's central role in thedisaster is neatly avoided. This historical airbrushing is something of a
feat, given the facts.”
Why Lehman was not rescued.
“Lehman failed before TARP was passed or even
proposed to the Congress. This meant that the Treasury Department had no legal authority to put
government money into the firm or provide a guarantee for its obligations.”