Bob Eisenbeis's Contributions

More on the Fed and Reverse Repos

In response to my commentary on Monday, a reader opined that there were even more basic implications of the Fed’s reverse repo experiment than I had suggested.

Are Reverse Repos the Answer to the Fed’s Exit Problem?

Thursday’s WSJ cited a draft paper by Brian Sack (former manager of the FOMC’s open market desk at the NY Fed) and Joseph Gagnon (a former senior officer at the Board of Governors).

What Have We Learned?

The FOMC surprised markets, economists, and almost everyone else who follows and whose decision processes are affected by what the Fed does. Markets had priced in a tapering, based upon both statements made by Chairman Bernanke immediately...

Jobs Data Argues for Tiny Taper in September

Former Vice President of the Federal Reserve Bank of Atlanta, Bob Eisenbeis, argues the Fed's best course of action this September is for an itty-bitty tiny taper, lest the market suffer shock

When Will the Fed Begin Tapering Its Asset Purchase Program?

This question is on all market participants’ minds. Attention is now centered on whether the process will begin, as some FOMC participants have suggested, as early as the September FOMC meeting.

The Dangers of Using Pseudo Research to Assess FOMC Forecast Accuracy

Monday’s WSJ published a purported research piece assessing the forecast accuracy of FOMC participants. Unfortunately, the work is fatally flawed from a design and conceptual perspective for reasons...

Forget Tapering and Exit via Reserve Requirements

The market turmoil that followed the last FOMC meeting suggests it may be time for a primer on the relationships among the Federal Reserve’s asset purchase program, its Federal Funds rate target policy, and its unconventional policy at the zero bound.

Just When You Think It Can’t Get Any Worse…

Since the FOMC’s June 22nd meeting, markets have been in turmoil. Commentators and Fed watchers have been speculating about exactly what Chairman Bernanke was trying to say on behalf of the Committee.

It Depends Upon the Data

Two keystones to current FOMC policy are transparency and effective communications. Both have taken a hit last week. Chairman Bernanke’s testimony before Congress did little to clarify how long the FOMC will pursue accommodative policy, what will cause it to begin to phase out its asset purchase program, or how that phase-out will proceed.

Never Let a Crisis Go to Waste

In the spirit of Rahm Emanuel, who famously said, “You never let a serious crisis go to waste,” it is time to get ready for the next shoe to drop in the sequestration soap opera.

Is the Job Market Stable?

The economy would have to create an average of about 273,000 jobs per month for the ratio of job creation to labor force size to equal what it has averaged historically during periods of prolonged expansion and labor-market stability.

Has EU Solved the Bank Capital Adequacy Problem?

Among all the negative consequences of the Cyprus banking crisis and the disastrous way that policy was framed, there is a silver lining to the problem.

The New Fed Policy

While much has been written about yesterday’s FOMC decision and Chairman Bernanke’s press conference, some important points have been missed that may shed new light on the state of the Committee’s current thinking about its asset purchase program and how it is likely to be managed.

The Mouse that Roared

Despite the miniscule economy of Cyprus, events unfolding around its banking crisis will have broad and long-lasting effects far out of proportion to its size. When we say small, we mean really, really small.

Duped Again

In Wednesday’s WSJ, journalists who follow the Fed reported on a new Fed working paper that provided detailed simulations of how the exit strategy that the FOMC laid out in June 2012 would affect the size of Federal Reserve remittances to the Treasury.

What Makes Us Think They Will Pay?

Notwithstanding all the political rhetoric in DC from both the President and members of Congress, responsible US budget scenarios that reflect current spending commitments and revenue streams show two things.

Three Myths and Misunderstandings

The last couple of days have emphasized how much misunderstanding exists about government policy and the Fed, even among supposedly seasoned members of the financial press.

Losing Money on the Replay

The release of the FOMC December minutes last Thursday was viewed by markets as a negative shock. Commentators and market participants focused in particular on what they viewed as “new” information, namely, that FOMC participants were divided over the best time to stop the newly extended quantitative easing programs.

Fed Watching and Forecasting Has Just Become More Important

The FOMC surprised most economists after its December meeting, not with its decision to extend its MBS purchases or to expand its long-term Treasury purchases, but with the changes to its communications strategy.

Poke ‘Em With a Stick: LIBOR Part III

On Wednesday, the NY Attorney General subpoenaed internal documents and communications among executives of several major foreign and US banks that were participants in submitting daily input to the British Bankers’ Association LIBOR fixing.

randomness