Paul-Martin Foss

Daily Money & Banking News Update: 3/1/2017

  1. High Prices Don’t Cause Economic Bubbles (Mises Institute)
  2. Minutes of January 23 and February 1 Discount Window Meetings (Federal Reserve Board)
  3. Markets Shift Attention From Trump Towards Federal Reserve (Financial Times)
  4. Federal Reserve Summary of Economic Conditions (Federal Reserve Board)
  5. Fed Shifts Away From Lingering Over Rate Rise Decisions (Financial Times)
  6. Fed’s Beige Book Says Business Optimism Has Cooled a Bit (MarketWatch)
  7. More Wells Fargo Customers May Be Affected by Sales Scandal: Filing (Reuters)
  8. Transitions in the Outlook and Monetary Policy: Speech by Governor Lael Brainard (Federal Reserve Board)
  9. Fed’s Kaplan Says Should Raise Rates Soon So Hikes Can Be Gradual (CNBC)
  10. Fed’s Brainard, Citing Improved Global Economy, Says Rates Can Rise “Soon” (CNBC)

Daily Money & Banking News Update: 2/28/2017

  1. Case for Fed Rate Hike Now a Lot More Compelling: Dudley (CNBC)
  2. The Role of the Fed’s Balance Sheet for the US Monetary Policy Outlook in 2017: Presentation by President James Bullard (St. Louis Fed)
  3. Why There Is No Fiscal Case for the Fed’s Large Balance Sheet (Alt-M)
  4. Virginia Sales Tax Exemption Expanded to Include Coins (Coin Update)
  5. Dallas Fed’s Kaplan: We Should Be in the Process of Removing Accommodation (CNBC)
  6. China’s Leaders Still Banking on “Irreplaceable” Central Bank Chief (CNBC)
  7. Trumpflation vs. Negative Rates: The Battle Endures (Wall Street Journal)
  8. The Newest Bank Blockchain: Will This Be the Breakthrough? (Wall Street Journal)

Daily Money & Banking News Update: 2/27/2017

  1. The Return of the Change Agent: Meet the Man Set to Shake Up China’s Banking Industry (CNBC)
  2. Thanks to Demonetization, India Could Lose Growth Crown (CNBC)
  3. Defending the Euro Starts With Cleaning Up the Banks (Wall Street Journal)
  4. Trump’s Call to Bring Back Jobs Test US Banks (Financial Times)
  5. US Banks Hit Brakes on Lending After Trump Election (Financial Times)
  6. Odds of March Fed Interest Rate Hike Spike Above 50% (MarketWatch)
  7. India Firms Fear Lingering Economic Aftershocks From Cash Crackdown (Reuters)
  8. “Bad Banks” Spread Across China (Wall Street Journal)
  9. China Eyes 12 Percent Broad Money Supply Rise in 2017: Sources (Reuters)

Donald Trump and the Federal Reserve’s Board of Governors

With the announcement earlier this week that Federal Reserve Board of Governors member Daniel Tarullo will resign effective April 5, 2017, the Federal Open Market Committee (FOMC) will likely find itself in a highly unusual situation come April, one in which the regional Federal Reserve Bank Presidents on the FOMC outnumber the members of the Board of Governors. The Board of Governors of the Federal Reserve System has been operating with two vacancies for several years, following the resignations of Jeremy Stein and Sarah Bloom Raskin in 2014, and Tarullo’s resignation will bring that to three open positions.

Let’s recall the structure of the Fed’s Board of Governors. Each of the seven governors is appointed to a 14-year term, with each term beginning on February 1st in an even-numbered year every two years and expiring 14 years later on January 31st. So a new term began on February 1, 2016, another will begin on February 1, 2018, another on February 1, 2020, etc. The two current open terms are the one that began in 2016 and the one that will begin in 2018. Tarullo’s term expires January 31, 2022. A governor appointed to a full term may not be reappointed, but a governor appointed to fill the remainder of an unexpired term may be reappointed for another full term.

The two current openings mean that President Trump could appoint someone to the current unexpired term that expires January 31, 2018, then reappoint that person to a full term that expires January 31, 2032. He could also appoint someone to the unexpired term that began February 1, 2016 that expires January 31, 2030, and that person could then be reappointed in 2030 until 2044. With Tarullo’s resignation, he could appoint someone to fill that unexpired term and, if he wins re-election in 2020, reappoint that person to serve until 2036. Finally, Vice Chairman Stanley Fischer’s term expires January 31, 2020, giving President Trump a fourth appointment opportunity until 2034. And, since Chairman Janet Yellen’s term as chairman expires in 2018 (her Board position expires in 2024), President Trump will also get to pick a new chairman next year.

Daily Money & Banking News Update: 2/24/2017

  1. China Says No Intention of Using Currency Devaluation to Its Advantage (Fox Business)
  2. Capital One Reveals Its Anti-Money-Laundering Program Is Being Probed (MarketWatch)
  3. Bitcoin Hits Record High Above $1200 on Talk of ETF Approval (CNBC)
  4. Trump Team Broadens Search for Fed Regulatory Post (Wall Street Journal)
  5. The Young Still Like Their Greenbacks (CNBC)
  6. GAO: Modifying Fed Stock Rules Could Diminish Reserve Banks’ Autonomy (Wall Street Journal)
  7. Yellen Will Be Last Fed Official to Speak Before Central Bank Makes Rate Decision (MarketWatch)

Daily Money & Banking News Update: 2/23/2017

  1. On Shrinking the Fed’s Balance Sheet (Alt-M)
  2. The Mortgage Market Is Now Dominated by Non-Bank Lenders (Washington Post)
  3. Mnuchin Says Treasury Studying 50- and 100-Year Bonds (CNBC)
  4. Move Over Greece, Italy’s Crisis Will Be Worse (Foundation for Economic Education)
  5. Bundesbank President: Did Not Suport Further ECB Stimulus (CNBC)
  6. China’s Chances of Being Called a “Currency Manipulator” Appear to Have Dropped (CNBC)
  7. Brussels and ECB Split on Monte dei Paschi’s Capital Proposals (Financial Times)
  8. Mnuchin Retreats From Trump Pledge on China Currency Manipulation (Financial Times)
  9. Lockhart Says March Rate Increase to Get Serious Consideration (CNBC)
  10. Taiwan Plans to Restrict Cash Purchases in Criminal Crackdown (Cointelegraph)
  11. Steve Mnuchin Is Learning What It’s Like to Be Janet Yellen (CNBC)
  12. Hensarling Warns Yellen Against Pushing New Regulations (Politico)
  13. Trump Calls Chinese “Grand Champions” of Currency Manipulation (CNBC)
  14. Fed Isn’t Ready to Cut Balance Sheet Yet (Wall Street Journal)

Daily Money & Banking News Update: 2/22/2017

  1. The Inherent Asymmetry in the Fed’s Monetary Policy (MarketWatch)
  2. Five Reasons for Central Banks: Are They Any Good? (Mises Institute)
  3. Kuroda: Bank of Japan Won’t Take Rates Deeper Into Negative Territory (MarketWatch)
  4. China’s Central Bank Leads Charge to Shine Regulatory Light on the Risky Business of Shadow Banking (CNBC)
  5. US Treasury Secretary Urges IMF to Police Exchange-Rate Policies of Members (Wall Street Journal)
  6. BOE’s Cunliffe Says Euro-Denominated Clearing Should Not Be Forced Into Eurozone (Reuters)
  7. The Economic Outlook and Monetary Policy: Speech by Governor Jerome Powell (Federal Reserve Board)
  8. Minutes of January 31-February 1 FOMC Meeting (Federal Reserve Board)
  9. Fed’s Powell Says Risks Facing Economy Are Now More in Balance (MarketWatch)
  10. Fed Minutes Show Support for Rate Hike “Fairly Soon” (MarketWatch)
  11. Powell, Keeping Cards Close, Says Fed to Gradually Hike Rates (Reuters)
  12. The New “Government Sachs” Isn’t Goldman Sachs (CNBC)
  13. Beware the Fed’s Warnings on Rates (Wall Street Journal)
  14. Fed Still Not Too Worried About Inflation (MarketWatch)
  15. Mnuchin Says a Stronger Dollar Is a “Good Thing” in the Long Run (MarketWatch)

Daily Money & Banking News Update: 2/21/2017

  1. SWIFT Is Recruiting Banks for Blockchain Tests (CoinDesk)
  2. Eurogroup Hails Progress With IMF on Greek Debt Deal (Financial Times)
  3. Cleveland Fed Chief “Comfortable” Raising Rates If Economy Keeps Performing (CNBC)
  4. Bank of England Says Raising Rates May Not Happen for Three Years (CNBC)
  5. India Prints New 1000 Rupee Note Three Months After Banning It (Cointelegraph)
  6. Russia Considers Cash Crackdwon to Halt Shadow Economy (Cointelegraph)
  7. US Labor Market Has “More Room to Run,” Fed’s Kashkari Says (CNBC)
  8. The Fed and the Market Are Having a Hard Time Getting on the Same Page (CNBC)
  9. March, May, or June? Minutes May Hold Clues on Timing of Next Interest Rate Hike (MarketWatch)
  10. Alan Greenspan Admits Ron Paul Was Right About Gold (Mises Institute)
  11. Q&A With Neel Kashkari (Minneapolis Fed)
  12. EU Banking Watchdog Eases Payments Rules to Boost Competition (Reuters)
  13. Dear China: Thank You for Manipulating Your Currency (Foundation for Economic Education)
  14. US Treasury Chief Tells IMF He Expects “Frank and Candid” Forex Analysis (CNBC)
  15. US Economy Looking Good, Fed Poised to Hike Rates: Harker (CNBC)
  16. The Fed Could Surprise the Markets When Traders Least Expect It (CNBC)

Daily Money & Banking News Update: 2/3/2017

  1. Fed’s Evans Wants Interest Rate Hikes at a “Slow Pace” (MarketWatch)
  2. Fed Puts More Emphasis on Commercial Real Estate in 2017 Stress Test (Reuters)
  3. Fed Outlines Terms for Bank Stress Test This Summer (Reuters)
  4. Fed’s Evans Sees Fiscal Boost to US Growth, Wants Slow Rate Hikes (CNBC)
  5. Trump Says He Will Cut “A Lot” Out of Financial Regulations (CNBC)
  6. Zimbabwe Introduces New “Bond Note” as Cash Shortages Bite (CNBC)
  7. US to World: Banking Deregulation Race Back On (Wall Street Journal)
  8. Trump Reforms Are Stuff of Banker Dreams (Wall Street Journal)
  9. Trump Economic Adviser Likens Wall Street Regulatory Regime to an Unappealing Restaurant Menu (MarketWatch)
  10. Trump Moves to Roll Back Obama-Era Financial Regulations (New York Times)
  11. Republican Attack on Fed Casts Doubt Over Global Bank Rules (Financial Times)
  12. China Tightens Monetary Policy by Raising Repo Rates (Wall Street Journal)
  13. UK Assures Gibraltar About Access to Financial Services Market and Sovereignty (MercoPress)
  14. Wall Street Stands With Two Fed-Hike Outlook for 2017: Reuters Poll (Reuters)
  15. The Uneasy Politician: Janet Yellen Is Struggling to Fend Off the Fed’s Many Critics (Wall Street Journal)