By Paul Kasriel – Back in mid-December 2016, the Fed started raising the federal funds rate by 0.25 of a percentage point per quarter. So, the federal funds rate has risen a cumulative 1.50 percentage points since then.
By Paul Kasriel – The current level of the federal funds rate is 1.92%. As of June 13, 2018, the median estimate of Federal Open Market Committee (FOMC) members of the appropriate federal funds rate by the end of 2081 was 2.40%.
By Paul Kasriel – In its April 2018 projections of the federal budget and economic performance based on current law out through FY 2028, the Congressional Budget Office (CBO) forecast the return of $1 trillion budget deficits...
By Paul Kasriel – With the recent US congressional passing and presidential signing of the Tax Cuts and Jobs Act of 2017 and the Bipartisan Budget Act of 2018, the federal budget deficit is projected to increase...
By Paul Kasriel – There has been chatter about whether the Tax Cuts and Jobs Act of 2017 (TCJA) will result in a temporary stimulus, or sugar high, to U.S. economic activity because of the increase in corporate after-tax profits and the increase in household...
By Paul Kasriel – OnJanuary11,Walmart announcedthatitwasraisingitsstartingwagerateto$11anhour,giving aone-timebonusupto$1,000toemployees,expandingitsparental/maternalleavepolicyand providingemployeesadoptingachildupto$5,000...
By Paul Kasriel – December 23rd is almost upon us. You know what that means. It’s time for me to work up my annual airing of grievances for Festivus 2017. Although I have myriad political-economic grievances...
By Paul Kasriel – It appears as though the rate on US federal corporate profits is going to be reduced. Although US corporations may be considered “people” in terms of the First Amendment, they are not “people” when it comes...
By Paul Kasriel – Germany’s central bank is the Bundesbank. Prior to the commencement of trading of the euro in January 1999, the Bundesbank conducted Germany’s monetary policy. The Bundesbank has a reputation for pursuing general...
Starting around this past December, growth in commercial bank credit (loans and securities) slowed precipitously. Annualized 13-week growth in bank credit of late is the slowest since the summer of 2013. This weakening in bank credit...
There has been much public discussion about the demise of US manufacturing jobs and policies to restore manufacturing employment. Indeed, as shown in Chart 1, in absolute as well as relative terms, US manufacturing employment...
As a result of some Fed actions taken in 1936 and 1937, the US economy, after experiencing a robust economic recovery starting in early 1934, slipped back into a recession midyear 1937, which lasted through midyear 1938.
As shown in Chart 1, the year-over-year growth in real and nominal Gross Domestic Purchases (C+I+G) in Q3:2016 was 1.4% and 2.4%, respectively. This compares with 2.8% and 4.7% year-over-year growth in real and nominal...
There may be rational reasons why the U.S. equity markets rallied in the wake of Donald Trump’s presidential election victory. But an expectation of faster U.S. economic growth due to a more “stimulative” fiscal policy is not one of them unless the larger...
I am so old that I can remember when the Fed tightened policy without any public announcements, often between FOMC meetings. Sometimes it took several days after the Fed implemented the tightening for a consensus to develop among...
Both 2016 US presidential candidates of the two major political parties are, to greater and lesser degrees, advocating the imposition of restrictions on US imports if foreign exporters engage in “unfair” trade practices. Regardless of
This past July 29, the Commerce Department surprised the economic cognoscenti by reporting that its advance estimate of second quarter real GDP annualized growth was a paltry 1.2%. The consensus estimate of Street economists was...
The Fed was cocked and primed to deliver a 25 basis point increase in the federal funds rate on June 15. But on June 3, the BLS announced that nonfarm payrolls increased a paltry 38,000 in May. This monthly random number prompted the Fed...
Recent economic data, e.g., retail sales, housing starts and industrial production, suggest that the US economy has awoken from its winter slumber. In addition, growth in consumer prices has accelerated of late (see Chart 1).
A new acronym has entered the lexicon of central banking in recent months – NIRP, which stands for negative interest rate policy. If ZIRP, zero interest rate policy, won’t stimulate faster growth in nominal spending and/or faster growth...
