The Demand Side

January 9, 2020

At an economic conference in San Diego last week, former Federal Reserve Chairman Ben Bernanke presented a paper outlining two unconventional policy tools central banks can use when economic crises render traditional monetary policy fruitless. The tools, forward guidance and quantitative easing, are policy mechanisms The Demand Side has discussed at length and should be well known to mo...

December 6, 2019

You may be surprised to learn that the Federal Reserve closely monitors something that has nothing to do with employment, interest rates, or inflation, but rather something behavioral — something that can’t be directly influenced by the Fed chairman or other members of the FOMC. 

What I’m referring to is investor perception.

The reason investor perception is important is that, in order fo...

November 2, 2019

If you are looking for something utterly terrifying to watch this Halloween season, check out Mervyn King’s speech at the IMF from a couple weeks ago.  

The former Bank of England governor used his lecture slot at the IMF’s annual meetings to not only cast doubt on the soundness of the American financial system, but also on the safety and soundness of the global financial system as a who...

October 4, 2019

With the craziness on Capitol Hill occupying our daily intake of media, I thought we could take a break from the barrage of political malfeasance currently dominating the news cycle and examine some election talking points that will be central to swaying independent voters in 2020.  

If we look past the primaries and turn our focus towards the general election, it seems that the wedge i...

September 24, 2019

If you had to guess, what would you say are the top priorities of the world’s foremost central bankers? 

Economists like myself would say maintaining stable prices and achieving maximum employment should top the list, as these are issues which dominate discourse among central bankers and what many first-world governments legally mandate. But last week, the debate over the role centr...

August 21, 2019

With the 2020 presidential campaign heating up and voters becoming more polarized by the hour, I have found an issue that we can all rally around. It's a problem that both republicans and democrats are culpable for leaving unaddressed, and one that will likely remain unaddressed no matter who wins the White House next year: public service loan forgiveness.

The Public Service Loan Forgive...

July 28, 2019

Following Theresa May’s resignation last month, Parliament voted Wednesday to name Boris Johnson the UK’s new prime minister. A firebrand conservative and known rabble rouser, Johnson stands to further divide the British electorate, adding brinkmanship to issues that have strained UK politics for years—the predominate one being Brexit.

In the few days since his swearing in, Johnson has a...

July 22, 2019

The House of Representatives passed the Raise the Wage Act Thursday, a bill mandating the national minimum wage increase from its current level of $7.25 to $15 per hour. This bill is a huge step in the right direction; and if passed, will be crowning achievement for workers at the bottom of the income spectrum. But the best part of the legislation isn't the pay increase. The best part,...

July 12, 2019

Wednesday, during its semi-annual hearing of Monetary Policy and the State of the Economy, the House Financial Services Committee hosted Federal Reserve Chairman Jerome Powell who reported on the Fed's economic outlook for 2019 and highlighted various economic "crosscurrents" he believes may impact the Fed's ability to achieve its dual mandate of stable prices and maximum employmen...

June 29, 2019

As a result of downward market pressure on most asset classes and lower than expected May employment figures, the Federal Reserve Federal Open Market Committee (FOMC) voted 9-1 last Wednesday to maintain its policy rage of 2.25-2.50%.

Now to those that pay attention, this doesn't come as much of a shock (Futures contracts priced in a 20% likelihood the Fed would decrease rates during the...

June 12, 2019

A couple weeks ago, the Wall Street Journal ran an editorial piece titled The Dollar May Be Knocked Off Its Pedestal which discussed, among other things, how the US dollar is losing its preeminent standing in world markets and could one day cease to be the world’s reserve currency. The article's logic followed that, because other major currencies have increased their trading volume rela...

May 20, 2019

In a recent New York Times op-ed, author William Cohan discussed one of the many perverse incentives available to primary creditors in today’s financial markets. The article highlights how, in recent years, hedge funds have begun purchasing corporate debt issued by distressed companies, then amending the terms of those securities in order to force said company into bankruptcy. Now you a...

July 8, 2018

With recent market volatility stemming from the administration’s assault on free trade, many investors have looked to classical market indicators to justify their belief that a recession is around the corner. One such indicator is the yield curve. A commonly used barometer for predicting coming recessions, the yield curve has successfully predicted each recession since 1975.

A typical tr...

June 17, 2018

In a word—no. The reason I raise this subject is because many democrats have positioned themselves as candidates driving an “us vs. them” narrative. While I agree with the view that there is an “us vs. them” dynamic in regard to political elites versus the average voter, corporations versus the individual, and even the Trump administration versus establishment republicans, democrats nee...

June 10, 2018

A flagship provision of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) was the implementation of the Volker Rule, a provision making it illegal for FDIC insured banks to trade for their own accounts—a practice commonly known as proprietary trading. Strongly opposed by those on Wall Street, this rule has since served as a tremendously effective firewall b...

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