PERC Blog


Authored by PERC staff, the PERC Blog focuses on policy issues including fiscal policy, Social Security and Medicare entitlement programs, income inequality and Federal Reserve policy.

Forecasting Recovery from the Covid-19 Recession: The Long (and Winding?) Road

Posted: August 04, 2020 by Dennis W. Jansen, Andrew J. Rettenmaier
The nation’s output, real GDP (i.e., GDP adjusted for inflation), took a big hit in the second quarter, falling almost 10%. Looking forward, should we expect an improvement in economic conditions for the remainder of 2020? The second quarter includes the months of April, May, and June. Up to this point, April was the hardest...
Tags: Fiscal Policy, FOMC

A January FOMC Post-Mortem

Posted: January 29, 2020 by Dennis W. Jansen, Thomas R. Saving
Media coverage the day following the Federal Reserve Open Market Committee’s (FOMC) action on January 29, 2020 widely applauded the Fed’s decision to maintain its target for the Fed Funds rate.  But the most important aspect of the December meeting was the decision to increase the interest paid on bank reserves, the IOER, from 1...
Tags: Federal Reserve, FOMC, Interest Rates

A December FOMC Post-Mortem

Posted: December 12, 2019 by Dennis W. Jansen, Thomas R. Saving
Media coverage the day following the Federal Reserve Open Market Committee’s (FOMC) action on December 11, 2019 widely applauded the Fed’s decision to maintainin its target for the Fed Funds rate.  But the most important aspect of the December meeting was to maintain the interest paid on bank reserves, the IOER, at its current l...
Tags: FOMC

The Fed and Interest Rates: Where to Now?

Posted: October 25, 2019 by Dennis W. Jansen, Thomas R. Saving
Since September, when the Federal Reserve reduced the top of the target range for the Fed Funds rate from 2.25% to 2.00%, a reduction 25 basis points, and reduced the interest rate paid on bank reserve balances from 2.1% to 1.8%, a cut of 30 basis points, market interest rates have continued to fall. As a result, the interest rate paid to banks ...
Tags: Federal Reserve, FOMC, Interest Rates

A September FOMC Post-Mortem

Posted: September 20, 2019 by Dennis W. Jansen, Thomas R. Saving
Media coverage on the day following the Federal Reserve Open Market Committee’s (FOMC) action, as announced on September 18, widely applauded the Fed’s lowering of its target for the Fed Funds Rate.  The most important change in the September meeting was reducing the interest paid on bank reserves, the IOER, by 30 basis points. ...
Tags: Federal Reserve, FOMC, Interest Rates

FOMC July 31: A Post-Mortem

Posted: August 05, 2019 by Dennis W. Jansen, Thomas R. Saving
On July 31 the Fed announced a 25 basis point cut in both its target band for the federal funds rate and in its rate of interest on excess reserves (IOER).  The new IOER would be 2.15%.  Media coverage widely parroted the statement that the Fed had lowered interest rates for the first time since the onset of the Great Recession.  ...
Tags: Federal Reserve, FOMC, Interest Rates

FOMC July 30-31: Ten Reasons to Cut Rates

Posted: July 29, 2019 by Dennis W. Jansen, Thomas R. Saving
Speculation is running high regarding whether the Federal Open Market Committee (FOMC) will cut interest rates – either the Federal Funds Rate upper bound or more importantly, the interest rate on reserves– at its next meeting scheduled for July 30 and 31.  Opinions are split on what the FOMC should do, and what they will do.&nb...
Tags: Federal Reserve, FOMC, Interest Rates

FOMC June 18: A Post-Mortem

Posted: June 25, 2019 by Dennis W. Jansen, Thomas R. Saving
Media coverage of the Federal Reserve Open Market Committee’s action on June 18 reported that the Fed left interest rates unchanged, with the Federal Funds Rate range holding steady at 2.25% -2.5%.  Unremarked upon by the financial media, and unmentioned in the lead section of the Fed's statement, was the fact that the Fed’s...
Tags: Federal Reserve, FOMC, Interest Rates

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