The Yellen Federal Reserve is more concerned about inflation taking off than the Bernanke Fed. If inflation moves up, the Yellen Fed will raise short term interest rates and slow the economy.
Ever heard of the Taylor Rule?
Not many people have, but the folks at the U.S. Federal Reserve are very familiar with it – and they’d probably prefer that this highly respected guideline for the federal funds rate languish in obscurity.
Resolving the issue of broken monetary transmission (discussed here) in the Eurozone will take more than buying periphery government bonds. David Powell from Bloomberg used the Taylor Rule to determine policy rates that would be appropriate for th…
The Fed’s impending blunder
“For a good insight into the thinking of the New Keynesian priesthood that rules our money and our lives, it is worth read…