tag:blogger.com,1999:blog-582368152716771238.post8994932870283719142..comments2024-03-28T11:14:02.660-05:00Comments on The Grumpy Economist: Is the Fed new-Keynesian?John H. Cochranehttp://www.blogger.com/profile/04842601651429471525noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-582368152716771238.post-13133659146905878532023-03-22T23:31:30.206-05:002023-03-22T23:31:30.206-05:00Yes, I noticed that too. Any, explanation as to w...Yes, I noticed that too. Any, explanation as to why the forecasts are way off?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-76614956213540773962022-07-28T10:23:26.701-05:002022-07-28T10:23:26.701-05:00what is r? some kind of interest rate? how is it c...what is r? some kind of interest rate? how is it calculated?EPohttps://www.blogger.com/profile/00876874263614894282noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-37193232135884398252022-04-28T17:02:59.323-05:002022-04-28T17:02:59.323-05:00This comment has been removed by the author.Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-4013808887284970162022-04-12T13:58:43.997-05:002022-04-12T13:58:43.997-05:00OEE,
"It would appear that the series cited ...OEE,<br /><br />"It would appear that the series cited don't support your contention for this current era, but did so in the past."<br /><br />Sure it does. The Fed (under Powell - Republican) began cutting interest rates in 2019 because interest expense on the federal debt along with defense expenditures were growing quickly and likely to consume all available tax revenue within the next few years.<br /><br />Powell is a political appointee from George Bush Jr.'s administration. In that administration his job was Treasury Undersecretary for Domestic Finance. That should tell you all you need to know about where his loyalties are placed.<br /><br />https://en.wikipedia.org/wiki/Jerome_Powell<br /><br />Dress it up with all the "expectations" drivel you want.FRestlyhttps://www.blogger.com/profile/09440916887619001941noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-28391224728098654122022-04-10T20:53:01.010-05:002022-04-10T20:53:01.010-05:00This comment has been removed by the author.Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-29954223654430171872022-04-08T20:05:27.344-05:002022-04-08T20:05:27.344-05:00This comment has been removed by the author.Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-34849388853588370412022-04-08T15:49:29.794-05:002022-04-08T15:49:29.794-05:00OEE,
"Or, was some other factor or factors a...OEE,<br /><br />"Or, was some other factor or factors at play that precluded the FOMC from adjusting its monetary playbook?"<br /><br />This:<br /><br />https://fred.stlouisfed.org/series/A091RC1Q027SBEA<br />https://fred.stlouisfed.org/series/FDEFX<br />https://fred.stlouisfed.org/series/W006RC1Q027SBEA<br /><br />2015-2019 - Federal tax receipts basically flat lined at about $2 Trillion<br />2015-2019 - Defense expenditures jump from $730 billion to over $900 Billion<br />2015-2019 - Interest expenditures jump from $428 billion to $589 Billion<br /><br />Doesn't take long before defense and interest expenditures consume all tax revenue.FRestlyhttps://www.blogger.com/profile/09440916887619001941noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-54576093135117282612022-04-08T02:53:14.109-05:002022-04-08T02:53:14.109-05:00Some fodder about the named additional shocks: why...Some fodder about the named additional shocks: why not financial stability?<br /><br />Since Jan 22, the aggregate value of Sovereign bonds has been reduced by higher yields in a measure which is not far from 10%.<br /><br />Mainstream asset pricing theory is covariance-based and attributes zero relevance to price levels or to stocks of financial assets. But they do matter, today more tha ever. Let's see how. <br /><br />A large number of professional and private investors' portfolio choices are still made referring to the over-simplified mean-variance set of tools, who goes back to the 1950s, a setup where stocks are always riskier than bonds (and prices always go up in the long term). <br /><br />Then today a large number of portfolios has to be rebalanced to restore the Jan 22 targeted portfolio composition. So: they have to sell stocks, and buy bonds. But, but, but ... now our friends at Eccles Building are selling bonds, at a 100bn-a-month pace (in Frankfurt, "we are not seeing any problem", zzzzzzz....). <br /><br />So, where will bond prices go (and here I am deliberately leaving the inflation factor aside)? Many tried to persuade that QE did not "have any influence on asset prices", but will eventually QT matter? Will aggregate portfolio values go upwards or downwards? In the latter case, will additional positions have to be liquidated, to run after market prices and get to that targeted portfolio balance?<br /><br />This is exactly how it worked, for a decade, on the way up. It may happen on the way down. What goes around comes around.Valter Buffo. Recce'd, Milannoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-82439633035778568092022-04-07T21:58:24.648-05:002022-04-07T21:58:24.648-05:00This comment has been removed by the author.Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-45616919295854493122022-04-07T13:58:00.622-05:002022-04-07T13:58:00.622-05:00This comment has been removed by the author.Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-25239074513346099262022-04-07T13:21:18.906-05:002022-04-07T13:21:18.906-05:00Dr Cochrane,
Thank you for the work. I'd be c...Dr Cochrane,<br />Thank you for the work. I'd be curious to know whether the model can explain the last 8 or so months, where the Fed was off by a mile? <br />Anonymousnoreply@blogger.com