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gdcox
ParticipantWell the Fed can’t keep on cutting because there will be nothing left to cut (like Japan/pushing on a piece of string) , but especially because bond yields would shoot up as the markets feared much higher and endemic inflation. So since long term rate mortgages are so important in the US, he would not want to totally spook the bond market when we move into 2009.
Xboxboy……… The Fed will raise rates once any recession is technically over. For example. say -1.0% pa annualised growth in Q1, Q2 and Q3, nothing in Q4 and 1% pa annualized in Q1 09. Rates may move down a bit more now and then raised in Q4 or Q1 08 and raised much further, faster as long as positive growth is forecast. This is the only way to bear down on inflation in the medium term and/or stop a new bubble growing after 2010. Bernanke has to raise rates quickly to a level significantly above core inflation once the recession threat/ reality has passed to avoid repeating the mistakes of Greenspan.
The Fed as you say must keep employment up, but in practice this means keeping growth going. If the groth numbes aboev occured, the main part of the economy would not be in recssion. it would primarily be the boom bits then went down(and need to ); eg house construction and mortgage brokers!
ParticipantWell the Fed can’t keep on cutting because there will be nothing left to cut (like Japan/pushing on a piece of string) , but especially because bond yields would shoot up as the markets feared much higher and endemic inflation. So since long term rate mortgages are so important in the US, he would not want to totally spook the bond market when we move into 2009.
Xboxboy……… The Fed will raise rates once any recession is technically over. For example. say -1.0% pa annualised growth in Q1, Q2 and Q3, nothing in Q4 and 1% pa annualized in Q1 09. Rates may move down a bit more now and then raised in Q4 or Q1 08 and raised much further, faster as long as positive growth is forecast. This is the only way to bear down on inflation in the medium term and/or stop a new bubble growing after 2010. Bernanke has to raise rates quickly to a level significantly above core inflation once the recession threat/ reality has passed to avoid repeating the mistakes of Greenspan.
The Fed as you say must keep employment up, but in practice this means keeping growth going. If the groth numbes aboev occured, the main part of the economy would not be in recssion. it would primarily be the boom bits then went down(and need to ); eg house construction and mortgage brokers!
ParticipantWell the Fed can’t keep on cutting because there will be nothing left to cut (like Japan/pushing on a piece of string) , but especially because bond yields would shoot up as the markets feared much higher and endemic inflation. So since long term rate mortgages are so important in the US, he would not want to totally spook the bond market when we move into 2009.
Xboxboy……… The Fed will raise rates once any recession is technically over. For example. say -1.0% pa annualised growth in Q1, Q2 and Q3, nothing in Q4 and 1% pa annualized in Q1 09. Rates may move down a bit more now and then raised in Q4 or Q1 08 and raised much further, faster as long as positive growth is forecast. This is the only way to bear down on inflation in the medium term and/or stop a new bubble growing after 2010. Bernanke has to raise rates quickly to a level significantly above core inflation once the recession threat/ reality has passed to avoid repeating the mistakes of Greenspan.
The Fed as you say must keep employment up, but in practice this means keeping growth going. If the groth numbes aboev occured, the main part of the economy would not be in recssion. it would primarily be the boom bits then went down(and need to ); eg house construction and mortgage brokers!
ParticipantWell the Fed can’t keep on cutting because there will be nothing left to cut (like Japan/pushing on a piece of string) , but especially because bond yields would shoot up as the markets feared much higher and endemic inflation. So since long term rate mortgages are so important in the US, he would not want to totally spook the bond market when we move into 2009.
Xboxboy……… The Fed will raise rates once any recession is technically over. For example. say -1.0% pa annualised growth in Q1, Q2 and Q3, nothing in Q4 and 1% pa annualized in Q1 09. Rates may move down a bit more now and then raised in Q4 or Q1 08 and raised much further, faster as long as positive growth is forecast. This is the only way to bear down on inflation in the medium term and/or stop a new bubble growing after 2010. Bernanke has to raise rates quickly to a level significantly above core inflation once the recession threat/ reality has passed to avoid repeating the mistakes of Greenspan.
The Fed as you say must keep employment up, but in practice this means keeping growth going. If the groth numbes aboev occured, the main part of the economy would not be in recssion. it would primarily be the boom bits then went down(and need to ); eg house construction and mortgage brokers!
Participant803 is not a large enough sample size statistically for a national survey.
Participant803 is not a large enough sample size statistically for a national survey.
Participant803 is not a large enough sample size statistically for a national survey.
Participant803 is not a large enough sample size statistically for a national survey.
Participant803 is not a large enough sample size statistically for a national survey.
ParticipantCritics of Bernanke forget one major, even mega-matter.
The US Congress requires by statute that the Fed keep inflation low AND growth going.
By contrast the Bank of England only has one target…inflation.
You can’t blame Bernanke for trying to take the edge of a probable recession. He is required to by his employers.
Also bear in mind that it is better for the US that the adjustment made inevitable by the the mad irresponsibility of many in recent years, is accomplished through a longer period of slow growth than a significant recession. The damage done by recession to hard working people and businessmen (and hence to the long term health and incentives of the economy) is appalling. Perfectly good firms ( ie not founded on bubble economics) are forced out of business because customers pay late or not at all, for example, and the banks withdraw previously reliable sources of finance for ordinary working capital needs.
In short, the best outcome is a period of slugflation as the Fed raised rate when the economy stabilises and during which time the regulators can sort out how to stop next time the financial hoodlums who caused this mess .
ParticipantCritics of Bernanke forget one major, even mega-matter.
The US Congress requires by statute that the Fed keep inflation low AND growth going.
By contrast the Bank of England only has one target…inflation.
You can’t blame Bernanke for trying to take the edge of a probable recession. He is required to by his employers.
Also bear in mind that it is better for the US that the adjustment made inevitable by the the mad irresponsibility of many in recent years, is accomplished through a longer period of slow growth than a significant recession. The damage done by recession to hard working people and businessmen (and hence to the long term health and incentives of the economy) is appalling. Perfectly good firms ( ie not founded on bubble economics) are forced out of business because customers pay late or not at all, for example, and the banks withdraw previously reliable sources of finance for ordinary working capital needs.
In short, the best outcome is a period of slugflation as the Fed raised rate when the economy stabilises and during which time the regulators can sort out how to stop next time the financial hoodlums who caused this mess .
ParticipantCritics of Bernanke forget one major, even mega-matter.
The US Congress requires by statute that the Fed keep inflation low AND growth going.
By contrast the Bank of England only has one target…inflation.
You can’t blame Bernanke for trying to take the edge of a probable recession. He is required to by his employers.
Also bear in mind that it is better for the US that the adjustment made inevitable by the the mad irresponsibility of many in recent years, is accomplished through a longer period of slow growth than a significant recession. The damage done by recession to hard working people and businessmen (and hence to the long term health and incentives of the economy) is appalling. Perfectly good firms ( ie not founded on bubble economics) are forced out of business because customers pay late or not at all, for example, and the banks withdraw previously reliable sources of finance for ordinary working capital needs.
In short, the best outcome is a period of slugflation as the Fed raised rate when the economy stabilises and during which time the regulators can sort out how to stop next time the financial hoodlums who caused this mess .
ParticipantCritics of Bernanke forget one major, even mega-matter.
The US Congress requires by statute that the Fed keep inflation low AND growth going.
By contrast the Bank of England only has one target…inflation.
You can’t blame Bernanke for trying to take the edge of a probable recession. He is required to by his employers.
Also bear in mind that it is better for the US that the adjustment made inevitable by the the mad irresponsibility of many in recent years, is accomplished through a longer period of slow growth than a significant recession. The damage done by recession to hard working people and businessmen (and hence to the long term health and incentives of the economy) is appalling. Perfectly good firms ( ie not founded on bubble economics) are forced out of business because customers pay late or not at all, for example, and the banks withdraw previously reliable sources of finance for ordinary working capital needs.
In short, the best outcome is a period of slugflation as the Fed raised rate when the economy stabilises and during which time the regulators can sort out how to stop next time the financial hoodlums who caused this mess .
ParticipantCritics of Bernanke forget one major, even mega-matter.
The US Congress requires by statute that the Fed keep inflation low AND growth going.
By contrast the Bank of England only has one target…inflation.
You can’t blame Bernanke for trying to take the edge of a probable recession. He is required to by his employers.
Also bear in mind that it is better for the US that the adjustment made inevitable by the the mad irresponsibility of many in recent years, is accomplished through a longer period of slow growth than a significant recession. The damage done by recession to hard working people and businessmen (and hence to the long term health and incentives of the economy) is appalling. Perfectly good firms ( ie not founded on bubble economics) are forced out of business because customers pay late or not at all, for example, and the banks withdraw previously reliable sources of finance for ordinary working capital needs.
In short, the best outcome is a period of slugflation as the Fed raised rate when the economy stabilises and during which time the regulators can sort out how to stop next time the financial hoodlums who caused this mess .
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