Viewsroom: Jack Dorsey’s heroic year ahead 19 Dec 2019 From banning political ads to developing cryptocurrency plans, the CEO of Twitter and Square has been politically more astute than rivals like Facebook. That sets him up for a good 2020. Also: the different ways that shareholders, the Fed and M&A bankers will tackle climate risk.
Jay Powell has golden chance to avow independence 18 Dec 2019 The Fed boss can distance himself from President Donald Trump by nudging the U.S. central bank to join a global green network that already includes 51 peers. This will defuse criticism that he has been too malleable on rates. And it may even help to save the planet from frying.
Now we’ve lost Paul Volcker, we must find another 9 Dec 2019 Opposed by politicians and economists, the former Fed chairman raised interest rates, overcoming inflation in the 1980s. A great central banker needs monetary policies that fit their time as well as rarer qualities like determination and integrity. Volcker had both.
Fed’s stability is an appreciating asset 20 Nov 2019 Ambassador Gordon Sondland implicated not just President Donald Trump, but also the vice president and secretary of state in the House impeachment probe. The central bank’s independence should comfort investors – unless Trump starts threatening Chair Jay Powell’s job again.
Fed cut is over-stuffing the cushion this time 30 Oct 2019 Another interest-rate reduction is what traders wanted. But U.S. stocks just hit a record high, the economy is chugging along with solid – if not spectacular – growth, and inflation has crept up. The Fed’s touted data dependency is looking more like addiction to the markets drug.
Breakdown: Fed needs adaptable repo response 8 Oct 2019 Chairman Jay Powell says the U.S. central bank will start buying bonds again to help ensure money markets stay well behaved. The Fed has learned a tough lesson from last month’s spike in repo rates: exiting the era of quantitative easing isn’t going to be easy.
Fed wrestles the unpredictable and the unintended 18 Sep 2019 Cutting interest rates again was the easy part. The whimsical trade policy of President Donald Trump and threats to oil supplies call for insurance. But stress in money markets is partly the U.S. central bank’s own handiwork. Chair Jay Powell is discovering the Fed’s new normal.
Money-market wobble is whodunnit without a villain 17 Sep 2019 The U.S. Fed pumped in $53 bln to calm interbank lending after rates spiked. The movements were dramatic, but the many causes look mostly mundane. Banks might use the ructions to argue they deserve a regulatory break. Such ripples, though, can be tolerated, and may have to be.
Bill Dudley blows the U.S. central bank’s cover 28 Aug 2019 The ex-New York Fed boss proposed monetary-policy resistance to Donald Trump’s trade war. To be fair, the president exploded norms first. Yet Dudley, though now a private citizen, has weakened the Fed's apolitical credentials. It paints Chair Jay Powell further into a corner.
Fed chief crafts central banker’s serenity prayer 23 Aug 2019 Jay Powell hopes to control what he can and rise above what he can’t. His speech at Jackson Hole highlighted trade battles, which he can’t influence, as a new challenge for rate-setters. But his tone suggests more willingness to weigh policy threats when shaping monetary policy.
Jerome Powell finds another way to please nobody 31 Jul 2019 The Fed chief presided over a quarter-point interest-rate cut on Wednesday, disappointing investors, presumably the president, and even some colleagues. Most people have enough worries, real or not, to want lower borrowing costs. Most economic statistics, though, say not yet.
New breed of central bankers is harder to read 11 Jul 2019 Jerome Powell at the Fed and Christine Lagarde, nominated to be the next ECB chief, are lawyers by training. Their thinking is more fluid than predecessors whose economic tenets informed a world view. That has benefits, but also means it’s harder to predict how they will react.
Hadas: Bond markets lost in inflation-growth gap 10 Jul 2019 Changing growth expectations explain most daily movements in bond prices, while falling inflation parallels the long-term trend of declining yields. Every so often, however, market gyrations reflect hopes that growth and inflation will reconnect. There’s little sign of that.
Trump’s latest Fed picks at least clear the bar 3 Jul 2019 Christopher Waller is a U.S. central bank insider. Judy Shelton is more of a maverick with her liking for the gold standard. Yet her business background might usefully add to debate at the Fed. They’re an improvement on the partisan hacks Trump offered up last time around.
Bank payout party is a lavish but sober affair 28 Jun 2019 JPMorgan, Goldman Sachs and large peers plan to hand $150 bln back to shareholders this year. Jumbo payouts were once a sign of excess profit. Now they show a lack of alternatives. Yet an old incentive is unchanged – buybacks’ ability to juice profit per share.
Buybacks prolong Wall Street rally nobody loves 20 Jun 2019 U.S. stocks are near record highs – thanks in part to purchases by their issuers. Investors are pulling out of equities and fund managers report extreme bearishness amidst a weakening global economy. Hopes of Fed rate cuts are a fragile support when it’s the only game in town.
Fed gives data one more chance 19 Jun 2019 The U.S. central bank held rates steady, though no longer says it’s patient. Policy setters are up against weaker global growth, trade worries, more dovish signals from Europe and Japan, market hopes of rate cuts and Donald Trump’s brickbats. The tension may last only six weeks.
Fed could do worse than mimic Donald Rumsfeld 5 Jun 2019 George W. Bush’s defense secretary famously talked of known knowns, known unknowns, and unknown unknowns. The U.S. central bank, seeking better communication, could borrow the categories. They help explain why markets now expect interest-rate cuts while Fed rate-setters don’t.
Bond market rate cut beats Fed to the punch 29 May 2019 U.S. Treasury yields have fallen over a quarter point in a month, equivalent to a central bank easing. Blame trade worries plus structural factors like weak inflation and negative rates overseas. Fed rate cuts are never a one-off; this market-led one is unlikely to be different.
The Exchange: John Taylor 13 May 2019 The economist and leading proponent of a rules-based strategy for monetary policy recently convened a powwow at Stanford’s Hoover Institution at which top policymakers brought diverse views on the Fed’s conduct to the fore. He fillets some of the choicest bits with Rob Cox.