Awash in Liquidity, Part I: Why Interest Rates Are Falling

First published at And why, in the short-term, increased market volatility will result. Despite a generally stronger economic outlook for the US economy, interest rates in May moved significantly lower, as if expectations were for an oncoming recession.  This has confounded many macroeconomists.  In this first installment of a two-part series, I will […]

Friedman Has Turned Over in His Grave; Do We Need Paul Volcker?

Milton Friedman must be quite happy that he isn’t alive today to witness the money printing by the major central banks, led by America’s Fed.  He has probably turned over in his grave at least 3 times in the last 5 years (QE1, 2, and 3).  In 1979 and 1980, when the Consumer Price Index […]

Is There a Social Agenda in Yellen’s Monetary Policy?

Recently released Federal Open Market Committee (FOMC) minutes (special strategy meeting) leaves me with the impression that there is not unanimity of thought among the participants that there is significant labor market slack.  In many Fed districts, labor markets appear to be tight.  Anecdotal evidence collected in these districts indicates that businesses are finding that […]