Share |

Finance

Fed's Forward Guidance Amounts to A "Considerable (Waste of) Time"

If you had told an economics practitioner 30 years ago that the Federal Reserve would hold the U.S. benchmark rate close to zero for six years, he would have said, nonsense. How could a highly developed $17.5 trillion economy function with such low interest rates for so long without generating huge imbalances or raging inflation?

Read more...
Three Ways the Government Criminalizes Economic Activity

“Although many politicians say they support economic growth, the federal government goes out of its way to criminalize broad ranges of economic activity. It’s as simple as this: A person or a company wants to provide a good or a service, and Uncle Sam says no.”

Read more...
The Fed’s Next Step

Now that the Federal Reserve has ended its massive bond-buying programs, will it take the next step towards re-normalizing its policies and signal that interest rates will soon be on the rise? The Federal Open Market Committee will answer this question on Wednesday, when it releases the policy statement at the close of its two-day meeting.

Read more...
New Technology Fuels America’s Energy Boom

The creativity of individuals cannot be overstated. At the same time that some are predicting that the plunge in oil prices will spell the end of the U.S. energy renaissance, cost-saving, innovative technologies such as the VorTeq are being developed and brought to market. This bodes well for continued growth in U.S. energy production, even in the face of falling oil prices. 

Read more...
Poor Black Friday Sales Aren’t What’s Holding Back the Economy

The reason retailers and economists obsess over America's favorite pastime is that consumer spending accounts for about two-thirds of gross domestic product. As the consumer goes, so goes the nation. Or does it? Someone once said that the wealth of nations comes not from what we spend but from what we sow. Like the farmer, a nation has to plant seeds in the spring to reap a good harvest in the fall.

Read more...
More Good News from the Fed

Minutes from the October meeting of the Federal Open Market Committee, made public last week, confirm the bullish tone struck by the shorter policy statement released earlier. While individual members see various risks, particularly from overseas, where the European and Asian economies appear to be weakening, as a group they acknowledged the considerable progress that the U.S. has made in recovering from the financial crisis and severe recession of 2007-2009 and the gathering momentum in various measures of aggregate activity that has appeared most recently. 

Read more...
Yellen Should Not Let Wages Be Her Guide

For its part, the Fed seems determined to see wages rise before it begins to normalize its benchmark rate. Given the wide gap between zero and some neutral rate, waiting for a signal from wages will be too late.

Read more...
Encima Global Projects World GDP Will Shrink in 2015

We had thought that global GDP would grow enough in 2015 to provide a platform for some further growth in U.S. corporate earnings. However, we now think world dollar GDP will decline 0.4% to $76.7 trillion in 2015 from our 2014 forecast of $77 trillion. A 2015 decline would be the first since 2009, with negative implications for corporate earnings and equity prices.

Read more...
The Challenge for the European Central Bank

The European Central Bank may disappoint once again at Thursday’s meeting.  Given deteriorating conditions in the euro area, the failure to embark on a quantitative easing program, as other major central banks have already done, becomes tough to defend.

Read more...
Stop Worrying About Deflation

Monetary policy should seek to avoid sustained deflation or very low inflation as part of its inflation targeting commitment. But that is not the same as believing that a short-run deviation from 2% inflation would pose a severe economic risk.

Read more...

e21 Projects & Partnerships