Wednesday, July 16, 2014


Bloomberg | Zero-Rate Calm Belied by Demand for 15-Year Mortgage Debt
For evidence that U.S. bond investors aren’t being satisfied by Federal Reserve Chair Janet Yellen’s dovish words, take a look at government-backed mortgage securities.
Bloomberg | Wholesale Prices in U.S. Increase More Than Forecast on Fuel
The 0.4 percent increase in the producer price index followed a 0.2 percent drop in May, the Labor Department reported today. The median estimate in a Bloomberg survey of 69 economists called for an advance of 0.2 percent. Fuel costs climbed 2.1 percent, the biggest gain since February 2013.
Bloomberg | Yellen Expects Fed to Reiterate Plan to Reduce Balance Sheet
Federal Reserve Chair Janet Yellen reiterated the central bank plans to reduce the size of its $4.38 trillion balance sheet as it normalizes monetary policy.

Econ Comments & Analysis                                                                                            
Investors | Fed's Failed Monetary Experiment About To End
The Fed: The recovery is not yet "complete," Federal Reserve Chairwoman Janet Yellen suggested Tuesday, but the central bank plans to let interest rates rise anyway. We'll soon learn just how solid this so-called recovery is.
WSJ | How to Spark Another 'Great Moderation'
Sound money and free markets go hand in hand. In 1776, Adam Smith wrote of the importance of rules for "a well-regulated paper-money" in "The Wealth of Nations." In 1962, Milton Friedman made the chapter "Control of Money," with its rationale for monetary rules, a centerpiece of "Capitalism and Freedom." In the 1980s, British Prime Minister Margaret Thatcher and President Ronald Reagan made sound money principles a key part of their market-based reform platforms.

WSJ | Fed’s George: Economy ‘Best Served’ By Fed Raising Rates
Federal Reserve Bank of Kansas City leader Esther George said Tuesday the economy would be “best served” by a steady and gradual campaign of short-term interest rate increases by the U.S. central bank.
WSJ | Yellen Uncomfortable With Proposed GOP Legislation for Fed
Ms. Yellen said she would welcome having a community banker on the central bank’s board, but added she does not believe new legislation is needed to ensure one is included.