Can The Fed Fix Biden/Congress Spending Addiction? Volcker, Greenspan, Yellen, Powell All Pushed Rates Lower … Until Biden (Fed Still Ignoring Taylor Rule) Mortgage Rates Continue To Climb
|
| |
Confounded Interest ^
| 10/21/2023 | Anthony B. Sanders
I had a wonderful time speaking at the Passive Investors Conference last night. One
question I was asked was “Why doesn’t Powell (the current Fed Chair) pull “a Volcker” to cool inflation. She was referring to former Fed Chair Paul Volcker’s sudden raising of The Fed’s target rate which resulted in a cooling of inflation, but also an increase in the 30-year fixed mortgage rate to 16.63% in 1981. Notice the trend in the Fed’s target rate and 30-year mortgage rate after Volcker’s rate shock. The trend in both has been downward as inflation was cooled. But, each Fed Chair...
|
|
|
US Mortgage Rates Rise To Over 7% As Fed Tightens Monetary Noose (Is Powell Chanelling Volcker?)
|
| |
Confounded Interest ^
| 03/03/2023 | Anthony B. Sanders
Yesterday’s inflation report (in the form on skyrocketing labor costs) helped lead Bankrate’s 30-year mortgage rate to over 7% … again. Here
is yesterday’s horrible unit labor costs YoY chart showing the fastest growth in labor costs since 1982 and Fed Chair Paul Volcker. Jerome Powell, the current Fed Chair is trying to reduce the Bernanke/Yellen/Powell monetary stimulypto (with an extra dose of “sugar” from the Covid outbreak). The good news is that the 10-year Treasury yield is down -7.3 basis points this morning. Here is The Fed’s Open Market Committee (FOMC) trying to summon Paul Volcker to help them...
|
|
|
Volcker and the Great Inflation: Reflections for 2022
|
| |
Misis Wire ^
| 09/21/2022 | Alex J. Pollock
The celebrated Paul Volcker (1927-2019) became Chairman of the Federal Reserve Board 43 years ago on August 6, 1979. The
20th-century Great Inflation, stoked by the Federal Reserve and the other central banks of the day, was in full gallop in the U.S and around the world. In the month he started as Chairman, U.S. inflation continued its double-digit run—that August suffered a year-over-year inflation rate of 11.8%. On August 15, the Federal Reserve raised its fed funds mid-target range to 11%, but that was less than the inflation rate, so a nominal 11% was still a negative real interest...
|
|
|
Bond Traders Stare at Worst Real Returns Since Paul Volcker Era Thanks To Inflation (The Fed’s Famous Chili!)
|
| |
Confounded Interest ^
| 12/13/2021 | Anthony B. Sanders
Inflation-adjusted return of Treasuries fell to lowest since the 1980s. For
bond investors, this is their version of Kevin’s Famous Chili from The Office! Or The Fed’s Famous Chili! Treasury investors are losing more money than they have in four decades, once inflation is taken into account. And if markets are right, they’re unlikely to come out ahead for years. The federal government’s debt has already lost about 2% outright over the past year as the Federal Reserve started removing pandemic-era stimulus from the economy and inched closer toward raising interest rates. But on top of that, the consumer price...
|
|
|
Powell and Biden ought to mimic Volcker and Reagan's inflation solution
|
| |
The Hill ^
| 12/07/2021 | CHRIS TALGO
For months, Biden administration officials have downplayed the current bout of inflation as “transitory,” suggesting it is only a temporary problem that will abate sooner rather than later. On
Nov. 30, while appearing before Congress, Federal Reserve Chairman Jerome Powell delivered quite a different message, saying it is time to “retire” the word “transitory” when referring to the 6.2 percent rate of inflation – a 30-year high – that is ravaging the U.S. economy. According to Powell, “We tend to use [the word transitory] to mean that it won’t leave a permanent mark in the form of higher inflation. I...
|
|
|
A Retrospective: How Paul Volcker Put The Country Above Himself And Wall Street
|
| |
The Federalist ^
| 12/16/2019 | By Willis L. Krumholz
ThereÂ’s a sense that the bureaucrats who command the federal leviathan work for themselves, not for the country at large. That
wasnÂ’t true of Paul Volcker. Since his death last week, Paul Volcker has been heavily eulogized. ThatÂ’s not the purpose here. In these trying times, AmericansÂ’ faith in our nationÂ’s institutions is at historic lows. Once-vaunted organizations like the FBI now struggle to command a majority of AmericansÂ’ support.The causes for this are legion. But there is a general sense that the vast federal appendages created in the last 100 years have little connection to the interests of...
|
|
|
Paul Volcker As 'Inflation Slayer' Is Hagiography, Not Biography
|
| |
RealClear Markets ^
| 12/16/19 | John Tamny
[Volcker's] obituaries were disappointing for them almost uniformly promoting the fiction of Volcker as inflation slayer. Such
a view doesn’t square with simple economic history. Indeed, explicit in the accepted wisdom that Volcker was “inflation’s worst enemy” (Hoover Institution’s John Taylor) is that economic growth causes inflation. As Phillips Curve devotee Neil Irwin put it in the New York Times, Volcker allegedly beat inflation “at the cost of what would become the worst recession in the seven decades between the Great Depression and the global financial crisis.” In the analysis of seemingly everyone, job loss and greatly reduced prosperity were...
|
|
|
Paul A. Volcker, Fed Chairman Who Waged War on Inflation, Is Dead at 92
|
| |
New York Times ^
| 12/09/2019 | By Binyamin Appelbaum and Robert D. Hershey Jr.
Paul A. Volcker, who helped shape American economic policy for more than six decades, most notably by leading the Federal Reserve’s brute-force campaign to subdue inflation in the late 1970s and early ’80s, died on Sunday in New York. He was 92. The
death was confirmed by his daughter, Janice Zima, who did not specify the cause. Mr. Volcker had been treated for prostate cancer, which was diagnosed in 2018. Mr. Volcker, a towering, taciturn and somewhat rumpled figure, arrived in Washington as America’s postwar economic hegemony was beginning to crumble. He would devote his professional life to wrestling with...
|
|
|
Paul Volcker dies at 92
|
| |
The Hill ^
| 12/9/2019 | SYLVAN LANE
Paul Volcker, the former chairman of the Federal Reserve under Presidents Carter and Reagan who later played a role in the Obama administration's response to the financial crisis of 2009, has died at the age of 92. Multiple
media outlets reported that Volcker, who raised interest rates as the Fed's chief to combat inflation, had died. In the Obama years, Volcker reemerged to tout a rule, eventually called the Volcker rule, that put tougher constraints on big banks.
|
|
|
Fed moves ahead on easing post-crisis 'Volcker Rule'....
|
| |
washingtonexaminer ^
| 5/30/2018 | by James Langford
The Federal Reserve voted Wednesday to seek input on a proposal to simplify the Volcker Rule, a provision of the post-financial crisis reform law that blocked banks from trading on their own accounts. The
proposed alterations would tailor compliance based on the size of a firm's trading assets, benefiting smaller institutions; clarify that firms trading within internal risk limits are conducting permissible market-making or underwriting activity; and limit the rule's impact on foreign activities of foreign banks. The Fed will accept comments for the next two months, a key step toward final adoption and implementation of the changes drafted by...
|
|
|
U.S. Considering 'Material Changes' to 'Volcker Rule'
|
| |
U.S. News ^
| 5 March 2018 | Pete Schroeder
The chief regulator for the U.S. Federal Reserve said Monday the nation's regulators are actively considering a significant rewrite of the "Volcker Rule." Fed Vice Chair for Supervision Randal Quarles told bankers gathered in Washington that regulators want to make "material changes" to streamline and simplify several aspects of the ban on
certain bank trading, put in place after the 2007-2009 financial crisis. His comments are the most explicit endorsement yet of regulators rewriting one of the central post-crisis rules, which bans banks from making profit-seeking trades on their own account. But its current form, completed in 2013, has been...
|
|
|
Wall Street hates the Volcker Rule. Will Trump finally kill it?
|
| |
Money CNN ^
| January 9, 2017: 1:32 PM ET | Matt Egan
Big banks shouldn't act like hedge funds by making dangerous bets that can ruin the economy. That's
the principle behind the Volcker Rule, a controversial part of the post-crisis Wall Street reform. The rule prohibits banks like Goldman Sachs or JPMorgan from making risky wagers with their own money and bans them owning big stakes in hedge funds or private-equity firms. The banks hate it. Wall Street has bitterly complained about the Volcker Rule for years... ...named after legendary Federal Reserve chairman Paul Volcker, who came up with the idea and fought hard to include it in Dodd-Frank. But recently,...
|
|
|
Federal Reserve delays parts of Volcker rule until 2017
|
| |
12/19/2014 12:20:11 PM PST
·
by Lorianne
BBC ^
| 18 December 2014
The US Federal Reserve has given Wall Street banks even more time to comply with parts of the Volcker Rule, a key provision of the 2010 Dodd-Frank financial reform bill. The
rule prevents federally-insured banks from using their own money when investing in certain risky assets. It will now grant an extension to other types of funds. Initially, the Fed had said banks would have until 21 July 2017 to stop trading in collateralised loan obligations, which essentially move the risk of investments in loans off their balance sheets.
|
|