The Institutional Risk Analyst

New York | Last week Federal Reserve Board Chairman Jay Powell blinked and thereby changed the monetary narrative. We suspect that this is just the start of a tactical retreat by the Fed in the face of mounting evidence of financial stress. Like the sailors who traveled to the New World with Columbus, Powell said something about nearing the “neutral rate” and promptly trimmed his sails for fear of encountering a reef. That reef, dear readers, is the sudden move in credit spr

Writing this week in Barron’s, Harvard economist Martin Feldstein nails the proverbial issue of excessive debt square on when he notes that European Central Bank chief Mario Draghi has run out of runway when it comes to policy prescriptions. He writes: “One of the goals of large-scale bond purchases—so-called quantitative easing— was to drive down long-term interest rates in order to stimulate business investment and housing construction. But with long-term interest rates no