The Federal Reserve and the US government together have injected more than $6 trillion into the economy. The US government's spending directly puts money in the hands of its citizens either by creating government jobs, or by sending out paychecks…
Tag: Fed
Goodbye To The Volcker Rule
Paul Volcker was the chairman of the Federal Reserve from 1979 to 1987. A period when United States experienced stagflation i.e. an environment where a region has high inflation coupled with high unemployment. Unlike the present situation (2020 - when…
The Federal Reserve Kicks The Can Down The Road
The US Stock market has been all over the place. Mr. Market becomes euphoric when any bad news is released, which isn't "that bad". Needless to say, the euphoria continues when there is any good news. With Federal Reserve's "whatever…
Where Is The US Economy Headed?
On April 9, 2020, the Department of Labor released new unemployment insurance weekly claims for the previous week to be 6.6 million. More than 16 million people have lost their jobs so far, and if we compare this to the…
Is A Global Recession Inevitable?
The stock market has been very volatile this past week. The Dow Jones Industrial Average dropped 10% on Thursday (3/12/2020) due to fears of coronavirus. This was the largest one day drop in US stock market since Black Monday of…
Why Is The Federal Reserve Not Ready For The Next Recession?
The Federal Reserve plays a key role in jump starting the economy during a downturn. As outlined on the Federal Reserve website, the Congress has directed the Fed to conduct the nation's monetary policy to support three specific goals: maximum…
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Repo Rate Spikes, And The Fed Starts Buying T-Bills. What Does That Mean?
The US Federal Reserve announced on Friday, October 11, 2019, that it will buy $60 billion of treasury bills (T-Bills) each month to build its reserve. Jay Powell, the Federal Reserve Chairman, said that this decision was made to address…
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US Economy, Federal Reserve, And Interest Rates
On September 18, 2019, the Federal Reserve decided to cut the interest rate by 0.25%. This has been the second rate cut of the year. Let me illustrate what is going on with an analogy. You can think of this…
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