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The Bank of England’s Flawed Approach to Monetary Policy

Central banks lack both the power and the knowledge needed to deliver stable growth.
January 3, 2013

Tom Clougherty

Canadian central bank chief Mark Carney, who will become governor of the Bank of England in June, caused a stir on both sides of the Atlantic when he appeared to endorse a monetary policy based on nominal gross domestic product (NGDP) targeting—a new monetary policy framework. A fresh approach to the current policy, which has manifestly failed to guarantee macroeconomic stability, is certainly long overdue. But could NGDP targeting have really prevented the financial meltdown and the ensuing recession as its advocates claim?

How Quantitative Easing Helps the Rich and Soaks the Rest of Us

And why the Occupy movement should be up in arms
September 17, 2012

Anthony Randazzo

The decision is in: Unlimited quantitative easing. That was the announcement from the Federal Open Market Committee this afternoon, launching a third round of purchases of securities in a bid to boost the economy and reduce unemployment. This time, Federal Reserve Chairman Ben Bernanke and crew are pledging to buy $40 billion per month until the economy improves. The Fed's policy committee also extended its zero-interest rate policy until “at least mid-2015.” If QE3 lasts that long, the Feds will be printing at least another $800 billion to buy mortgage-backed securities.   

The Fed's Harmful Monetary Policy

From a long-term perspective, the Federal Reserve is doing more harm than good right now to economic stability
July 18, 2012

Anthony Randazzo

 

Today’s monetary policy debates sound increasingly like the process of trying to get a picture on the wall centered and straight: “A little more to the left.” “No, that’s not helping, more to the left.” “Yes, that is helping.” “No, that is making it worse, back to the right.” Depending on your perspective, the picture is either crooked or straight. And when a host of people is noisily debating whether the frame should be tilted left or right, the sound can become downright unhelpful. The same goes for monetary policy.

 

What Twists Will We See from the FOMC Tomorrow?

June 19, 2012, 1:36pm

Victor Nava, Anthony Randazzo

Rumors are flying everywhere that the Fed is going to ease policy again after its meetings today and tomorrow. The Financial Times declared yesterday that "the doves are ready to act." And a report in Forbes suggests that more Fed easing is likely to come sooner rather than later, in the form of an extension of the Feds Operation Twist program. JP Morgan Chase and Barclays are also both expecting the FOMC will extend the $400 billion dollar (to this point) bond swap program known as Operation Twist.

Considering Causes of Recessions vs. Rates of Recessions

April 27, 2012, 3:14pm

Anthony Randazzo

Assuming the desirability of a recession rate, speed of economic growth, and level of equality all divorced from their causes is not a leap of logic we should lightly undertake.

The Fed As Source of Income Inequality

April 23, 2012, 2:24pm

Anthony Randazzo

We've noted before that income inequality is not inherently a bad thing—what matters is the source of the inequality. In last week's WSJ, hedge fund founder Mark Spitznagel points out one bad source creating artificial income disparagement... the Fed.

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