Yellen - Hydraulic Keynsian

[Listening]

Janet Yellen, A Hydraulic Keynesian, Will Deliver 'That '70s Show' Re-Runs - Forbes

I can't seem to copy anything from the article.

However, it is pretty good description of the differences in the way people see the economy.

I, for one, hope she falls down some steps real soon.

 

[editec]

I got as far as them suggesting that under Bretton Woods the dollar wasn't being over printed.

Npw FORBES ought to know better.

Why do you suppose the Bretton Woods agreement fell apart?

Because we just kept spending money we didn't have.

The USA went off the gold standard because if it hadn't?

The rest of the world (holding US dollars) would have stipped this nation of every ounze of gold it had.

Hell FRANCE SEND A WARSHIP into the New York Harbor to get their gold, that's how little they trusted our lying government of that day.

 

[Listening]

“She is, more than previous Fed chiefs, an old-style “hydraulic Keynesian” who believes she can act as a control engineer over the economy, printing money to drive down unemployment.”

From the article.

This is just great.

Obama hasn't figured out he can't control it, but just like BillyBob00...he's not going to give up trying.

Sell your stocks folks......

 

[waltky]

I suspect the real reason is to keep our economy expanding to help pay off the debt...

Global economy worries prompt Fed to hold rates steady
September 17, 2015 | WASHINGTON (Reuters) - The U.S. Federal Reserve kept interest rates unchanged on Thursday in a bow to worries about the global economy, financial market volatility and sluggish inflation at home, but left open the possibility of a modest policy tightening later this year.

In what amounted to a tactical retreat, Fed Chair Janet Yellen said developments in a tightly linked global economy had in effect forced the U.S. central bank's hand. "The outlook abroad appears to have become less certain," Yellen told a news conference after the Fed's policy-setting committee released a statement following a two-day meeting. She added that a recent fall in U.S. stock prices and a rise in the value of the dollar already were tightening financial market conditions, which could slow U.S. economic growth regardless of what the Fed does. "In light of the heightened uncertainty abroad ... the committee judged it appropriate to wait," Yellen said.

The policy statement also nodded squarely to the global economy as a decisive variable within Yellen's "data-dependent" Fed, warning that recent developments abroad and in financial markets might restrain economic activity somewhat and likely put further downward pressure on inflation in the near term. But the Fed maintained its bias toward a rate hike sometime this year, while lowering its long-term outlook for the economy. Fresh economic projections showed 13 of 17 Fed policymakers foresee raising rates at least once in 2015, down from 15 at the last meeting in June.

Traders work underneath a television screen showing Federal Reserve Chair Janet Yellen announcing that the Federal Reserve will leave interest rates unchanged on the floor of the New York Stock Exchange in New York

Traders in futures markets cut bets that the central bank would lift rates by December to around a 47 percent probability, from 64 percent before the release of the policy statement. "We're in the same situation we were in before, which is uncertainty about when are they going to move," said John Bonnell, a senior portfolio manager at USAA Investments in San Antonio, Texas.

Four Fed policymakers now say rates should not be raised until at least 2016, compared to two who felt that way in June. The Fed has policy meetings in October and December. In deciding when to hike rates, the Fed repeated it wanted to see "some further improvement in the labor market," and be "reasonably confident" that inflation will increase. The dollar fell sharply against a basket of currencies after the release of the statement. Stocks initially edged higher before falling and ending the trading session lower. Prices for U.S. Treasuries rose.

'MORE DOVISH'

See also:

Fed holds rates unchanged amid low inflation, financial tumult
September 17, 2015 - Following the conclusion of a closely watched meeting, the Federal Reserve is keeping interest rates at record lows, citing a weak global economy, low inflation and instability in financial markets.

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the FOMC said in a statement released at the conclusion of its latest two-day meeting. In a press conference following the statement's release, Fed Chair Janet Yellen said "the situation abroad bears close watching," an acknowledgement of the recent flare up of volatility in global markets, such as in China.

There has been debate recently over how closely the Fed is watching foreign developments, particularly after Vice Chairman Stanley Fischer in August said, "the Fed's statutory objectives are defined in terms of economic goals for the economy of the United States, but I believe that by meeting those objectives, and so maintaining a stable and strong macroeconomic environment at home, we will be best serving the global economy as well."
Betsey Stevenson, a former Chief Economist at the Labor Department who is now at the University of Michigan, tweeted that she believes the Fed made the right call.

Inflation measures

The Fed noted that the U.S. economy continues to expand at a moderate pace and that inflation expectations have been muted. It said the housing sector has shown further improvement. It also noted improvedments in the labor market saying "on balance, labor market indicators show that underutilization of labor resources has diminished since early this year." U.S. Treasury bonds rallied after the Fed announcement. The 2-year yield was the standout, plunging 11%, or 0.089 percentage point, to 0.722%. Bond yields move in the opposite direction of prices.

Meanwhile, U.S. markets fluctuated after the news, with financial stocks taking a hit. And futures traders are pricing in a 28% probability that the Fed could hike rates next month and a 60% likelihood that the Fed will wait until Januarty to increase interest rates from the zero bound they have hovered at since 2008, according to Bloomberg. The Fed on Thursday also upgraded its median GDP projections for 2015 but lowered estimates for 2016 and 2017. The Fed now is expecting median GDP growth of 2.1% for 2015, 2.3% for 2016 and 2.2%in 2017. It is expecting unemployment to decline to 4.8% by 2016, slightly lower than it had projected in June.

MORE

 

[waltky]

Just how close it was - Granny says next time around, look fer a rate hike...

Fed's Williams still sees 2015 rate hike after 'close call'
Sat Sep 19, 2015 | An interest rate hike will likely be appropriate this year given the U.S. Federal Reserve's decision last week to stand pat was a "close call," a top Fed policymaker said on Saturday.

John Williams, a centrist and president of the San Francisco Fed, said the arguments for and against beginning to tighten U.S. monetary policy are about balanced now that the economy is on solid footing, giving him confidence in continued economic and labor market growth. Williams, the first U.S. policymaker to speak publicly since the Fed's much-anticipated decision on Thursday, suggested he is almost ready to pull the trigger on a rate hike.

He acknowledged the risks from a slowdown in China and global downward pressure on inflation, noting a rate rise in 2015 is not guaranteed. But he said full U.S. employment should be achieved "in the near future" and inflation, while still too low for comfort, should gradually move back to a 2-percent goal. "Given the progress we've made and continue to make on our goals, I view the next appropriate step as gradually raising interest rates, most likely starting sometime later this year," he said at a weekend conference on the China-U.S. financial system.

The Fed's decision to leave rates near zero "was a close call in my mind, in part reflecting the conflicting signals we're getting," he said. "The U.S. economy continues to strengthen while global developments pose downside risks to fully achieving our goals." On Thursday, the Fed cited risks from abroad and downward pressure on U.S. inflation from a high dollar and low commodities as reasons to stand pat. Investors reacted to the cautious tone by pushing bets of a rate hike into 2016, with a Fed meeting in January given a near 50 percent probability, according to futures markets. Policy-setting meetings are also scheduled for October and December.

Williams, a voter this year on policy who supported Thursday's decision, is a close ally of Fed Chair Janet Yellen and is seen as aligned with the central bank's core decision-makers. Like other Fed officials who aimed to raise rates this month, he decided to hold off after discouraging signs of weakness in China that prompted a global and volatile market selloff in August and September. However, Williams said the China situation is not "dire." Global developments "definitely present significant challenges and risks, but overall I am quite positive about the outlook for the U.S. economy," he said. The Fed's key rate has been near zero since the depths of the recession in late 2008.

Fed's Williams still sees 2015 rate hike after 'close call'

See also:

Fed's Lacker says economy strong enough for higher rates
Sat Sep 19, 2015 - Richmond Federal Reserve President Jeffrey Lacker on Saturday said he dissented at a Fed policy meeting because he thought the economy was now strong enough to warrant higher interest rates.

Fed policymakers on Thursday voted to keep the Fed's target interest rate at between zero and a quarter point. "Such exceptionally low real interest rates are unlikely to be appropriate for an economy with persistently strong consumption growth and tightening labor markets," Lacker said in a statement. He was the lone dissenter among the 10 Fed officials who voted at the meeting. Lacker said the Fed's target should rise by a quarter point.

Lacker has a history of dissent in Fed policy meetings. In 2012, he voted against eight straight policy decisions by the central bank. At the time he was urging the Fed to wind down asset purchases that were aimed at stimulating the economy. Regarding Thursday's decision at the Fed, Lacker said a rebound in consumer spending and "tightening labor markets" meant the economy no longer needed zero interest rates.

He said keeping interest rates at their current level deviated from the way the Fed has responded to the economy in the past, which was dangerous because public understanding of the Fed's behavior was "an essential foundation for the monetary stability we currently enjoy." "Such departures are risky and raise the likelihood of adverse outcomes," Lacker said.

Fed's Lacker says economy strong enough for higher rates

Related:

St. Louis Fed's Bullard says argued for rate hike at meeting
Sat Sep 19, 2015 - St. Louis Fed President James Bullard said he argued against last week's decision by the U.S. Federal Reserve to hold interest rates steady, and felt other policymakers had not made a compelling case for yet again delaying a rate hike.

Bullard does not currently vote on the Fed's policy setting committee and thus could not join Richmond Fed chief Jeffrey Lacker in dissenting from the decision to hold rates near zero for at least another six weeks. But he was sharply critical of the decision in remarks to a community banking group here. "The Committee has not, in my view, provided a satisfactory answer," to how near zero interest rates align with close to full employment and continued economic growth, Bullard said. Even though inflation is weak, rates will still be extraordinarily low even after an initial rate increase, Bullard said, and thus would continue to support economic growth and ultimately higher prices. "The case for policy normalization is quite strong," Bullard said, contending that the Fed's dual employment and inflation objectives "have essentially been met."

Rather than clarify the Fed's direction, Bullard said last week's decision seemed to increase uncertainty about the direction of the U.S. economy. Bullard has been among the more vocal proponents of an earlier rate hike, though last month on the sidelines of the central bank's Jackson Hole summit in Wyoming he acknowledged that global market volatility might cause the central bank to hold fire. However markets have appeared more stable in recent weeks, and Bullard said there seemed no reason to hold back. "It is as if the Fed, upon making a single 25 basis point move, will suddenly be adopting a restrictive monetary policy," he said in a prepared presentation. "But this is far from the truth."

Thirteen of 17 Fed members last week said they still expect to hike rates this year, so Bullard's criticism may be only narrowly about timing. The Fed meets again in October and December to debate whether to begin raising rates. But it also indicates a larger degree of division creeping into the central bank's discussions, as new concerns about low global inflation weigh against the progress the U.S. economy has made in lowering unemployment. San Francisco Fed President John Williams said on Saturday in New York the decision last week had been a "close call." In it statement the Fed cited global risks as a main concern.

St. Louis Fed's Bullard says argued for rate hike at meeting

 

[Dont Taz Me Bro]

Our interest rates need to start returning to a more normal level. Keeping this low is bad for the economy in the long run because it drives people to more riskier investments

 

[EdwardBaiamonte]

Our interest rates need to start returning to a more normal level. Keeping this low is bad for the economy in the long run because it drives people to more riskier investments

actually the problem is people are making fewer and less risky investments now because so many got burned in the housing crisis, because Obama's economy is so slow, and because the world economy is so slow.

The idea is to keep rates low to get the economy moving; not stall it with higher rates.

 

[Dont Taz Me Bro]

actually the problem is people are making fewer and less risky investments now because so many got burned in the housing crisis, because Obama's economy is so slow, and because the world economy is so slow.

The idea is to keep rates low to get the economy moving; not stall it with higher rates.

100% stupid as always. Admit you don't have the IQ to understand.

 

[EdwardBaiamonte]

actually the problem is people are making fewer and less risky investments now because so many got burned in the housing crisis, because Obama's economy is so slow, and because the world economy is so slow.

The idea is to keep rates low to get the economy moving; not stall it with higher rates.

100% stupid as always. Admit you don't have the IQ to understand.

dear, if its stupid you have to say why. How will you learn if you are afraid to try??