I Was Wrong About ZIRP

Not, mind you, because the Fed will raise interest rates any time soon. No, the geniuses at the Federal Open Market Committee and the Board of Governors seem to be leaning in a different direction: NIRP. … Better get used to seeing those initials. They stand for negative-interest-rate policy. That’s right. The Fed thinks they can drive nominal short-term interest rates below zero. Continue Reading →

Watch for Interest Rates to Rise Soon

The Fed’s attempt to rescue the economy using monetary policy alone has been a fool’s errand. Now they face a Sophie’s choice: (1) Do nothing and watch inflation increase, or (2) drain the excess reserves from the system and watch interest rates rise. Actually, interest rates will rise either way. Continue Reading →