tag:blogger.com,1999:blog-5713178645208582139.post6101315472951401725..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Yes, IOER Continues to be Bad Political OpticsDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-5713178645208582139.post-36305749110209911372018-03-09T13:30:16.871-06:002018-03-09T13:30:16.871-06:00When the next crisis happens, how will the Fed res...When the next crisis happens, how will the Fed respond? I would think by buying more debt and thereby lowering the federal reserve rate - meaning the IOR will go lower too. Where will the excess reserves go then? And what will be the impact on the economy? Anonymoushttps://www.blogger.com/profile/07255596719303101770noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-32568274256217929132018-01-21T22:16:07.886-06:002018-01-21T22:16:07.886-06:00We should "normalize" the rate paid on I...We should "normalize" the rate paid on IOR. What did we pay for 95 years straight? Zero? Sounds good to me. Zero IOR.<br /><br /><a href="https://xn--72c5ahabc3duab1fba8b4p0b6h.com/%E0%B8%A7%E0%B8%B4%E0%B8%98%E0%B8%B5%E0%B9%81%E0%B8%97%E0%B8%87%E0%B8%9A%E0%B8%AD%E0%B8%A5-maxbet/" rel="nofollow">แทงบอล maxbet</a><br /><br /><a href="https://www.xn----5wf1ckabc2gcm4eca0xra1dyb6g.com/boonmeehttps://www.blogger.com/profile/00327511249005942332noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-3121856292378936052018-01-18T14:57:44.501-06:002018-01-18T14:57:44.501-06:00Really interesting post,specially the data showing...Really interesting post,specially the data showing that remittances to the Treasury are declining due to the increase in IOER.Anonymoushttps://www.blogger.com/profile/11645504969334201311noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-3905954790726253932018-01-14T15:43:21.984-06:002018-01-14T15:43:21.984-06:00We should "normalize" the rate paid on I...We should "normalize" the rate paid on IOR. What did we pay for 95 years straight? Zero? Sounds good to me. Zero IOR. billnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-12743313013533205122018-01-12T22:36:40.343-06:002018-01-12T22:36:40.343-06:00Nice treatment,
Now a laugher question:
OT but ...Nice treatment,<br /><br />Now a laugher question: <br /><br />OT but related and a conundrum: <br /><br />We are told in monetary policy that “expectations” are very important. The Fed must signal and then the public will “expect” certain levels of inflation.<br /><br />But!<br /><br />For about the last 40 years, conventional US macroeconomists (and the bulk of the financial community) have Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-28496840772500837042018-01-11T11:26:05.288-06:002018-01-11T11:26:05.288-06:00Ben, cash has historically been the largest part o...Ben, cash has historically been the largest part of the monetary base. There has been a secular growth in demand for it that continues to this day. This cash was not a problem before for monetary policy and shouldn't be one going forward. <a href="http://macromarketmusings.blogspot.com/2017/10/the-other-side-of-feds-balance-sheet.html" rel="nofollow">Here is a post;</a> where I touched on David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-56117763531975973582018-01-11T11:02:50.507-06:002018-01-11T11:02:50.507-06:00That is a great question. I would love to hear you...That is a great question. I would love to hear your take on it. My sense is that IOER should have a direct bearing since it effectively would set the rate of funding costs for banks.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-84897534933939037212018-01-11T10:57:31.283-06:002018-01-11T10:57:31.283-06:00JP, that is an interesting idea and it must be pra...JP, that is an interesting idea and it must be practical since RBNZ did it. Is RBNZ still on a corridor system? I thought they returned to a floor system?<br /><br />The Fed could follow RBNZ's example. But the Fed could also hold IOER fixed until short-term market rates have risen above it. Not sure that would take too long (though the might have to use something like its term deposit David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-31452665267965055122018-01-11T09:48:41.143-06:002018-01-11T09:48:41.143-06:00The economics profession should be concerned about...The economics profession should be concerned about whether bad optics equals 'bad substance'.<br /><br />Are you aware of any serious studies that analyse the marginal net interest margin effect on the banking system of IOR?JKHhttps://www.blogger.com/profile/06322177539880818556noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-5167806888898130822018-01-11T00:13:52.026-06:002018-01-11T00:13:52.026-06:00"...here is an easy fix to this problem. The ..."...here is an easy fix to this problem. The Fed can move from its current floor system to a corridor system. Under the latter, the balance sheet can shrink down so that there are few reserve balances in the banking system"<br /><br />That could take years to achieve at the current rate of selling off assets. Another option would be to do what New Zealand did to get off the floor in JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-63121526692801782842018-01-10T22:45:47.562-06:002018-01-10T22:45:47.562-06:00Great post.
Bad optics? In general, regulatory a...Great post. <br /><br />Bad optics? In general, regulatory agencies become captured by the regulated (they are ones with an intense interest in the topic, and resources and lobbyists etc). <br /><br />Is it too cynical to consider the Fed a creature of the financial industry? <br /><br />BTW, cash in circulation is exploding, so the Fed will be unable to reduce its balance sheet below $2.5 Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.com