Economic Commentary
A difficult job becomes even more difficult
ECONOMY & POLICY March 17, 2023 Chief Economist Eugenio J. Alemán discusses current economic conditions. Monetary policy, ever difficult to conduct, became even more difficult over the last week as one of the most difficult processes in banking came to fruition for one bank and brought down another bank in the process: a bank […]
Recent bank failures a potential game-changer for the Fed
ECONOMY & POLICY March 13, 2023 Regulators’ prompt response and the creation of a new lending facility should limit broader market fallout from recent bank failures, notes Chief Investment Officer Larry Adam. It is often said that the Federal Reserve (Fed) tightens until something breaks. In fact, history is peppered with examples of financial accidents caused […]
Monetary cycle versus fiscal cycle: What is the difference?
ECONOMY & POLICY March 10, 2023 Chief Economist Eugenio J. Alemán discusses current economic conditions. The Federal Reserve (Fed) conducts monetary policy through its main instrument, the federal funds rate, which is the rate banks charge each other in the overnight market. Quantitative easing/tightening, e.g., the buying/selling of Treasurys as well as mortgage-backed securities […]
Markets should not fight the Fed this time around
ECONOMY & POLICY March 03, 2023 Chief Economist Eugenio J. Alemán discusses current economic conditions. The Federal Reserve (Fed) and the markets have continued to go at each other to try to impose their view of what needs to happen with interest rates and their views seem to be highly divergent. We have already […]