{"id":43473,"date":"2019-02-03T12:00:23","date_gmt":"2019-02-03T17:00:23","guid":{"rendered":"https:\/\/olduvai.ca\/?p=43473"},"modified":"2019-02-03T12:00:30","modified_gmt":"2019-02-03T17:00:30","slug":"weekly-commentary-no-mystery","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=43473","title":{"rendered":"Weekly Commentary: No Mystery"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"http:\/\/creditbubblebulletin.blogspot.com\/2019\/02\/weekly-commentary-no-mystery.html\">Weekly Commentary: No Mystery<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">January 30 \u2013 Financial Times (Sam Fleming): \u201cAfter putting traders on notice six weeks ago to expect further increases in US interest rates in 2019, the Federal Reserve\u2026 executed one of its sharpest U-turns in recent memory. Leaving rates unchanged at 2.25-2.5%, Jay Powell, Fed chairman, unveiled new language that opened up the possibility that the next move could equally be down, instead of up. Forecasts from the Fed\u2019s December meeting that another two rate rises are likely this year now appear to be history. Changes to its guidance were needed, Mr Powell argued, because of \u2018cross-currents\u2019 that had recently emerged. Among them were slower growth in China and Europe, trade tensions, the risk of a hard Brexit and the federal government shutdown. Financial conditions had also tightened, he added. Yet the about-face left some Fed-watchers wrongfooted and bemused. Many of those hazards were already perfectly apparent in the central bank\u2019s December meeting, when it lifted rates by a quarter point and kept in place language pointing to further \u2018gradual\u2019 increases.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Wall Street Journal\u2019s Greg Ip pursued a similar path with his article, \u201cThe Fed\u2019s Mysterious Pause.\u201d \u201cLast December, Mr. Powell noted his colleagues thought they\u2019d raise rates two more times this year, from between 2.25% and 2.5%, which was at the lower end of estimates of \u2018neutral\u2019\u2014a level that neither stimulates nor holds back growth. On Wednesday, he suggested the Fed could already be at neutral: \u2018Our policy stance is appropriate right now. We also know that our policy rate is in the range of the\u2026 committee\u2019s estimates of neutral.\u2019 If indeed the Fed is done, that would be a breathtaking pivot. Yet the motivation remains somewhat mystifying: What changed in the past six weeks to justify it?\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Weekly Commentary: No Mystery January 30 \u2013 Financial Times (Sam Fleming): \u201cAfter putting traders on notice six weeks ago to expect further increases in US interest rates in 2019, the Federal Reserve\u2026 executed one of its sharpest U-turns in recent memory. Leaving rates unchanged at 2.25-2.5%, Jay Powell, Fed chairman, unveiled new language that opened [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[7756,303,8262,431,16888,534,3650],"class_list":["post-43473","post","type-post","status-publish","format-standard","hentry","category-economics","tag-credit-bubble-bulletin","tag-fed","tag-financial-times","tag-interest-rates","tag-jerome-powell","tag-monetary-policy","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/43473","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=43473"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/43473\/revisions"}],"predecessor-version":[{"id":43474,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/43473\/revisions\/43474"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=43473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=43473"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=43473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}