PeakTrader.com Forum Index PeakTrader.com
Economics, Portfolio Optimization, and Technical Analysis
 
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 
Log inFast Charts

Fed before Crisis

 
Post new topic   Reply to topic     PeakTrader.com Forum Index -> Articles
View previous topic :: View next topic  
Author Message
administrator
Site Admin


Joined: 28 Dec 2005
Posts: 10287

PostPosted: Mon Feb 29, 2016 2:34 pm    Post subject: Fed before Crisis Reply with quote

Professor Hamilton:

In addition to episodes during the zero-lower-bound regime, another period that stands out in their index is the “measured pace” of the Greenspan tightening of 2004-2005, in which the Fed telegraphed that it was planning to implement a 25-basis-point hike in the fed funds rate at every FOMC meeting. Although this approach was intended to reassure markets with the predictability of Fed actions, with hindsight it is clear to many of us that it was a mistake not to adapt monetary policy more quickly to the developing house price bubble.

---

PeakTrader:

U.S. annual per capita real GDP growth in 2004-06 was 2.04%, which is less than the 1982-07 average of 2.30%.

So, it seems, the tightening of 1/4 point at each meeting in 2004-06, from 1% to 5 1/4%, wasn’t a mistake.

I agree, the easing took place too quickly in 2008. However, that’s because the easing began too late.

One big problem was too much capital was directed into the housing market. It should’ve been redirected into tax cuts. So, households could pay-down and pay-off debt.

****

It seems, per capita real GDP growth slowed to less than 1% in 2007. And, the economy peaked in December 2007 – basically after a 25-year boom.

---
Back to top
View user's profile Send private message
Display posts from previous:   
Post new topic   Reply to topic     PeakTrader.com Forum Index -> Articles All times are GMT - 8 Hours
Page 1 of 1

 
Jump to:  
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Powered by PeakTrader 2.0.8 © 2001, 2002