(As the Fed is once again planning to unwind its balance sheet, the size of which doubled as a result of its COVID-19-crisis Quantitative Easing, we think it worthwhile to draw your attention to a 2017 exchange, on the fiscal implications of such an unwind, between two…
If the recent yield curve panic proves anything, it proves that, in financial markets, what may start out as a mere statistical correlation, and possibly a spurious one, can become a genuine causal relationship. In particular, if enough people subscribe to a post-hoc fallacy, it may not…
Regular Alt-M readers are no doubt looking forward to the FOMC's announcement next Wednesday. But I doubt they'll be sitting at the edges of their seats between now and then, much less biting their fingernails. Markets have, after all, been anticipating a modest Fed cut ever since…
So it has come to pass. In his recent press conference, Chairman Jerome Powell has at last made official the Fed's plan to stick to its post-crisis "floor" system of monetary control, which uses changes in the interest rate paid on banks' excess reserve balances, rather than…
The "big news" from Janet Yellen's recent press conference, which was hardly news at all to those who have followed the Fed's past announcements, was that Fed officials, having long promised to eventually undo much if not all of the vast balance sheet growth brought about by…