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What a Jerome Powell-Fed may look like

“Beyond monetary policy, Powell takes a far more laissez-faire stance on regulation than, say, Sen” writes D C for marketwatch.com. Wall Street likes Powell for his reputation of being dovish on monetary policy, at least for a Republican.Powell is now the favorite in betting markets amid published reports he’s in the lead to get Trump to nominate him. Source: marketwatch.com Share This:

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John Taylor impresses Trump team for Fed chair

“Taylor’s stricter adherence to systematic rules for raising interest rates does not mesh with Trump’s view of keeping interest rates low to bolster asset prices though” writes Brian Schwartz for foxbusiness.com. He’s also known for a paper he proposed in 1993 called the “Taylor Rule,” which was a recommendation about how nominal interest rates should be determined.Taylor met with Trump last Wednesday and he’s become a favorite of Vice President Mike Pence because he believes Taylor represents “sound monetary policy,” according to sources familiar with the matter. Source: foxbusiness.com Share This:

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Wall St ends flat; late gains on Fed Powell report

“U.S. stocks closed flat on Thursday, coming back from sharp losses after the open, while Apple fell more than 2 percent to lead a decline in technology shares” reports foxbusiness.com. The S&P turned positive minutes ahead of the close after Politico reported that Federal Reserve Governor Jerome Powell is the leading candidate to become President Donald Trump’s nominee for Fed chair, in what would be a continuation of the current stock market-friendly monetary policy. (Reporting by Caroline Valetkevitch and Rodrigo Campos; Editing by Nick Zieminski).  Source: foxbusiness.com Share This:

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The only thing scary about the Dow is that nothing seems to scare it

“Call it whatever you want, but the Federal Reserve is likely the biggest cause of the low volatility market, and most traders agree with me” writes unknown author for cnbc.com. I don’t think it’s a coincidence that the rise in passive investing has corresponded with the rise in low volume and low volatility.Passive investing, by definition, is a low volatility style of investment. Source: cnbc.com Share This:

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Fed flunks econ 101: understanding inflation

“One of the newer, more laughable explanations for persistently low inflation is that inflation expectations have slipped” writes Caroline Baum for marketwatch.com. Strangelove approach and learn to stop worrying and live with low inflation and low unemployment.Hence, normalizing interest rates is “on track,” as the headline above noted, even though the relationship — between unemployment and inflation — is decidedly off track.Option #1 involves learning to live with a low, stable inflation rate about 0.5 percentage point below the Fed’s explicit 2% target.Option #2 means taking some additional actions to…

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Janet Yellen deserves a second term as Fed chair

“Gary Cohn, a senior Trump economic adviser, has no monetary-policy experience, and his performance developing a tax-reform framework for the Trump administration does not recommend him” reports washingtonpost.com. He should pick the person who already has a proven track record of competence and care in the conduct of the nation’s monetary policy: current Fed Chair Janet L. Yellen.The Fed has cautiously but steadily raised interest rates and recently announced the gradual unwinding of the asset purchasing program it undertook during the Great Recession.Despite new regulations and tightening monetary policies, the…

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One easy explanation for Fed Chair Yellen’s low inflation ‘surprise’ is staring her in the face

“Despite only four hikes in just under two years the Fed has subdued inflation expectations and therefore inflation.”” writes Pedro Nicolaci Da for businessinsider.com. That makes it rather curious that Fed Chair Janet Yellen and her colleagues have said they are “puzzled” by the pattern of low inflation.Central bankers firmly believe inflation expectations are a good predictor of future inflation, making it a crucial indicator on their economic dashboard.”Job growth, wage growth, inflation and inflation expectations are all likely somewhat lower than they would have been had the FOMC not…

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Fed’s Janet Yellen Says the Economy Remains in Good Health

“She added that she saw little evidence soft inflation in the United States is the result of a change in the global economy” writes Binyamin Appelbaum for nytimes.com. Some Fed officials regard weak inflation as evidence the Fed should retreat more slowly from its stimulus campaign.She said anticipation of changes like tax cuts has buoyed measures of consumer and business confidence, but there is little evidence so far of increased investment and investment. Source: nytimes.com Share This:

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