tag:blogger.com,1999:blog-5713178645208582139.post2263274162348394523..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: The Fed Did Not Make A Mistake In DecemberDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-5713178645208582139.post-35234978477747163442016-02-03T14:51:41.236-06:002016-02-03T14:51:41.236-06:00Excellent post; this is a better way of describing...Excellent post; this is a better way of describing what happened.ssumner@bentley.eduhttps://www.blogger.com/profile/12597713698236031523noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-18897698290746529652016-02-02T12:19:54.572-06:002016-02-02T12:19:54.572-06:00David,
The S&P500 tends to exhibit a stable, ...David, <br />The S&P500 tends to exhibit a stable, recognizable "trend growth" over a short time span? If you can support that thesis, I suggest you have billions to make as a quant! <br /><br />The true counterfactual is to look at every other rate hike signalling period and see what happened to the stock market. Up until Jan, I suggest this one was an outlier in terms of how Diego Espinosanoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-86740440006888893172016-02-02T12:00:06.524-06:002016-02-02T12:00:06.524-06:00The FED will extend their mistake out into perpetu...The FED will extend their mistake out into perpetuity.Babuhttps://www.blogger.com/profile/01276144465468411434noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-84615869133699604182016-02-02T10:23:15.487-06:002016-02-02T10:23:15.487-06:00Given (1) and (2), that's a permazero or perma...Given (1) and (2), that's a permazero or perma-subzero policy. Which is OK, if that's what you want.<br /><br />"Where is the inflation you promised from increased policy rates?"<br /><br />1. 1/4% doesn't buy you much inflation.<br />2. You understand we only have December price numbers, I hope. The rate increase happened Dec. 17.Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-89609656129738655072016-02-02T10:15:51.055-06:002016-02-02T10:15:51.055-06:00when will the FED and the Keysians admit defeat on...when will the FED and the Keysians admit defeat on the lowering of interest rates as stimulating inflation? they just bray for more. marcusbalbushttps://www.blogger.com/profile/13596266889368486043noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-22249622677138436812016-02-02T10:05:37.269-06:002016-02-02T10:05:37.269-06:00Where is the inflation you promised from increased...Where is the inflation you promised from increased policy rates?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-67788509953465738032016-02-02T05:34:10.329-06:002016-02-02T05:34:10.329-06:00Thought-provoking post! Can you be a bit more expl...Thought-provoking post! Can you be a bit more explicit about the counterfactual? Are you suggesting that if the FOMC consisted of 12 Paul Krugman types, all sending consistent signals throughout 2015 that rates would remain at zero thru at least 2016, that the S&P 500, US industrial production and Chinese reserves would not have declined? Is that what you're advocating? I get it that Anonymoushttps://www.blogger.com/profile/04074807412723348222noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-23976944801791253732016-02-02T03:57:21.424-06:002016-02-02T03:57:21.424-06:00This comment has been removed by the author.João Marcushttps://www.blogger.com/profile/13658264244033012660noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-78877011498246307952016-02-02T03:57:06.937-06:002016-02-02T03:57:06.937-06:00David, if you take NGDP growth as indicator of the...David, if you take NGDP growth as indicator of the stance of monetary policy, the result is the same, with NGDP growth shooting down after mid-2014 when the "rate hike talk" became pervasive!<br />https://thefaintofheart.wordpress.com/2016/01/17/the-plunging-economy/João Marcushttps://www.blogger.com/profile/13658264244033012660noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-59347622902887971532016-02-02T01:33:25.279-06:002016-02-02T01:33:25.279-06:00My guesses
1) Headline unemployment under 5%, U6 ...My guesses<br /><br />1) Headline unemployment under 5%, U6 under 7%, with participation rate above 65%<br /><br />2) Easiest policy rule ever: raise rates only when several (at least 2 third) inflation indicators are well above the target(2.3% or more) for several months in a row (or the running average on 6 months is above target for 2/3 of those inflation indicators), always erring on the safeLuciomhttps://www.blogger.com/profile/01749123970887316792noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-77021551564620677662016-02-01T18:21:18.673-06:002016-02-01T18:21:18.673-06:00I think the PBOC is trying to avoid a similar to t...I think the PBOC is trying to avoid a similar to this over-communication error that the Federal Reserve committed--which would have harmed its credibility had it not hiked in December: https://ipehub.wordpress.com/2015/12/21/peoples-bank-of-china-again-not-following-the-fed-3/Steven Kellyhttp://ipehub.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-83150838728652042472016-02-01T14:32:49.336-06:002016-02-01T14:32:49.336-06:00Great post. I have been doing sort of the same ana...Great post. I have been doing sort of the same analysis and reach same conclusion. <br /><br />You can throw the oil price in the mix as well. Although Fed and other central banks take it as exogenous, the decline in the oil price coincides with Fed, PBOC tightening since July 2014, which to me suggests that it is Fed policy, and OPEC/Shale oil, that had caused oil prices to drop. Jens Pedersenhttps://www.blogger.com/profile/06983060697076128062noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-41225643415535348532016-02-01T14:14:27.097-06:002016-02-01T14:14:27.097-06:00"...the economy was not back at full employme..."...the economy was not back at full employment."<br />"The Fed, in other words, got ahead of the recovery..."<br /><br />Two questions:<br /><br />1. What's your measure of full employment?<br />2. What's your policy rule? Seems like anything short of "full employment" means you stay at zero.Stephen Williamsonhttps://www.blogger.com/profile/01434465858419028592noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-54161701825061445242016-02-01T12:53:53.185-06:002016-02-01T12:53:53.185-06:00Excellent
They bias what they expect with what th...Excellent<br /><br />They bias what they expect with what they want<br /><br />And end up conflicting with data dependency<br />JKHhttps://www.blogger.com/profile/06322177539880818556noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-28782728617952855742016-02-01T12:07:06.863-06:002016-02-01T12:07:06.863-06:00Great post.Great post.Kevin Erdmannhttps://www.blogger.com/profile/07431566729667544886noreply@blogger.com