2019-09-09 20:38:00 Mon ET
federal reserve monetary policy treasury dollar employment inflation interest rate exchange rate macrofinance recession systemic risk economic growth central bank fomc greenback forward guidance euro capital global financial cycle credit cycle yield curve
Harvard macrofinance professor Robert Barro sees no good reasons for the recent sudden reversal of U.S. monetary policy normalization. As Federal Reserve Chair Jerome Powell yields to the persistent demands of a vocal president, the FOMC approves an interim interest rate cut by quarter point to 2%-2.25%. This rate cut represents a clear departure from the current business cycle of interest rate hikes in recent years. Barro advocates the Taylor monetary policy rule that the nominal interest rate should rise in response to higher inflation and economic output both relative to their targets. In accordance with the key Taylor monetary policy rule, the nominal interest rate normally tends toward a gradual long-term equilibrium path.
In this light, Barro regards the recent interest rate reduction as a special deviation from the prior path of U.S. monetary policy normalization. Federal Reserve Chair Jerome Powell seems to justify the recent interest rate cut in terms of the fact that U.S. inflation remains low and tame as the economy operates near full employment despite continual trade escalation between the U.S. and China. Barro indicates the clear and present danger that the recent rate reduction represents a dovish Powell response to many stock market analysts and the Trump administration.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2018-01-12 07:37:00 Friday ET

The Economist delves into the modern perils of tech titans such as Apple, Amazon, Facebook, and Google. These key tech titans often receive plaudits for mak
2018-09-03 09:31:00 Monday ET

Amazon follows Apple to become the second American public corporation to hit $1 trillion stock market valuation. Amazon's founder and chairman Jeff Bezo
2018-11-01 08:36:00 Thursday ET

Ford and Baidu team up to test autonomous cars in China. For the next few years, Ford and Baidu plan to collaborate on the car design and user acceptance te
2019-01-02 06:28:00 Wednesday ET

New York Fed CEO John Williams listens to sharp share price declines as part of the data-dependent interest rate policy. The Federal Reserve can respond to
2019-06-19 09:27:00 Wednesday ET

San Francisco Fed CEO Mary Daly suggests that trade escalation is not the only risk in the global economy. Due to the current Sino-U.S. trade tension, the g
2018-08-05 12:34:00 Sunday ET

JPMorgan Chase CEO Jamie Dimon sees great potential for 10-year government bond yields to rise to 5% in contrast to the current 3% 10-year Treasury bond yie