tag:blogger.com,1999:blog-5713178645208582139.post3663924608615590144..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: The Fed Gets What It Wants: A 1%-2% Inflation Target CorridorDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-5713178645208582139.post-40430928200638712062016-01-05T15:14:20.966-06:002016-01-05T15:14:20.966-06:00As I try to grasp this economic debate, not being ...As I try to grasp this economic debate, not being an economist, I am struck by the fact that the Fed is in the business of protecting banks, not fixing the economy. The Fed won't have your backs, Market Monetarists. The Fed will let you down even if it created a bubble again in housing. And really, don't people really want a bubble in real production instead of in housing? And even then, Gary Andersonhttp://www.talkmarkets.com/content/bonds/the-federal-reserve-knew-libor-was-exploding-in-2007-and-did-nothing?post=81296noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-2795979033800415082015-12-21T12:59:08.222-06:002015-12-21T12:59:08.222-06:00Wow, ad-hominen attacks versus engaging the argume...Wow, ad-hominen attacks versus engaging the argument. Very convincing anonymous.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-28782029197458553232015-12-21T06:20:38.498-06:002015-12-21T06:20:38.498-06:00Sorry right back. Your saying nothing. Nominal spe...Sorry right back. Your saying nothing. Nominal spending in the 00's is a blip, not a target. Your a mess. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-53520001240582459372015-12-17T10:04:43.738-06:002015-12-17T10:04:43.738-06:00"I forget the exact language used, but both h..."I forget the exact language used, but both have used the 2% figure in language as if the target were a ceiling." <br /><br />Then they're sending mixed messages because to me the meaning of this statement is crystal clear:<br /><br />"So let me be clear—2 percent is our objective. We want to see inflation go back to 2 percent; 2 percent is not a ceiling on inflation."<brPJGhttps://www.blogger.com/profile/12161085228475118853noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-28751430182529027112015-12-16T22:43:04.172-06:002015-12-16T22:43:04.172-06:00Excellent blogging.
In addition, both Yellen and...Excellent blogging. <br /><br />In addition, both Yellen and Fischer have made comments about the economy "getting back to the 2% target," so tightening is okay. I forget the exact language used, but both have used the 2% figure in language as if the target were a ceiling. <br /><br />Never has a Fischer or a Yellen said, "You know, 2% is an average target. If we run at 3% Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-47242954670728002762015-12-15T15:12:24.790-06:002015-12-15T15:12:24.790-06:00Sorry anonymous, but we have only partly made our ...Sorry anonymous, but we have only partly made our way back. Look at the <a href="http://macromarketmusings.blogspot.com/2015/06/the-long-unwind-of-excess-money-demand.html" rel="nofollow">share of household liquid assets</a> which drives spending. It is still adjusting. Or look at these <a href="http://davidbeckworth.wix.com/ngdp-watch" rel="nofollow">estimates of nominal spending relative to David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-10530232847887811712015-12-15T14:48:41.043-06:002015-12-15T14:48:41.043-06:00The path of aggregate spending is already stable. ...The path of aggregate spending is already stable. Get your head out of backside and look at the real path. The 00's were a BRIC driven blip. It is back to its normal path. <br /><br />Inflation ex-commodities is indeed rising. The market is a mess right now. They got so used to a way to trade, they have forgotten to look at under the hood and see what is really going on. Look at November Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-54863351564727198712015-12-15T14:46:55.527-06:002015-12-15T14:46:55.527-06:00Anonymous, based on your logic the Fed must have c...Anonymous, based on your logic the Fed must have crashed the oil marketing 2008-2009! Seriously, do you really think the Fed controls oil prices? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-81185483816407325032015-12-15T14:40:22.472-06:002015-12-15T14:40:22.472-06:00Sorry, but inflating the oil bubble in 2010 was st...Sorry, but inflating the oil bubble in 2010 was stupid. Core CPI is 2%. Deal with it. The Fed has figured out lowering oil prices is the key to stability. They should have known that in 2010 and never did any QE. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-5133137229176405942015-12-15T11:32:44.054-06:002015-12-15T11:32:44.054-06:00The Fed continues to erode it's credibility.
...The Fed continues to erode it's credibility.<br /><br />The 5-year Treasury-TIPS breakeven rate is currently ~ 1.2%. The 5-5 forward breakeven rate is 1.75% and falling. At the same time, futures market prices indicate better than an 80% chance that the Fed will tighten on Wednesday. So the market believes the Fed will take action this week to keep medium run and long run inflation within PJGhttps://www.blogger.com/profile/12161085228475118853noreply@blogger.com