There are few economists that have had a bigger influence on my thinking about monetary matters than former Richmond Fed economist Robert Hetzel.
Bob is not only one of my biggest intellectual heroes, but also a very a good friend and I am therefore extremely happy that he has allowed to publish some of this insights and thoughts on Fed’s 50bp ’emergency’ rate cut today.
Lars Christensen
Fed and Covid19
By Robert Hetzel
Cutting the funds rate just before an FOMC meeting sends a strong but not necessarily appropriate message. The fact that the cut came without the discussion from the regional Bank presidents of their respective regions that would come routinely at an FOMC meeting suggests that the FOMC was responding to the decline in the stock market.
That turned out badly for the Fed in October 1987 when the market fell 20% and the FOMC cut the funds…
View original post 598 more words
Utopia, you are standing in it! 
Recent Comments