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The Institutional Risk Analyst

News, Views & Analysis

September 28, 2019

In this issue of The Institutional Risk Analyst, we feature a comment by Robert Eisenbeis, Vice Chairman & Chief Monetary Economist at Cumberland Advisors in Sarasota.Dr. Eisenbeis was formerly Executive Vice-President and Director of Research at the Federal Reserve Bank of Atlanta.

As you read his analysis, ponder the enormous importance of the decision by then FRBNY President E. Gerald Corrigan to shut down the bank's dealer surveillance function in the wake of the 1991 Solomon Brothers scandal. He later crossed the street to Goldman Sachs & Co. Corrigan retired in 2016, but the FRBNY is still struggling to rebuild its market surveillance capabilities. See also "Gone Fishing" (1993) and "Nightmare on Wall Street: Salomon Bro...

July 5, 2019

In this issue of The Institutional Risk Analyst, we feature a comment by Robert Eisenbeis, Ph.D., Vice Chairman & Chief Monetary Economist at Cumberland Advisors. We continue to believe that the Federal Open Market Committee (FOMC) will not change the target for Fed funds during 2019.  When will the equity markets connect the proverbial dots?   

In the commentary leading up to the June meeting, I argued that some relaxation of the tariff issues with Mexico, combined with relatively good data for the US economy, would make the FOMC’s decision to hold pat on rates relatively easier. While the FOMC did decide at its June meeting to hold rates constant for the moment, the dot charts and dissent by President Bullard suggest th...

May 10, 2019

New York |  In this issue of The Institutional Risk Analyst, we feature a market comment from Robert Eisenbeis, Vice Chairman & Chief Monetary Economist at Cumberland Advisors.  Dr. Eisenbeis asks: Why is the stock market showing more volatility than bonds?  Why indeed. He concludes with a typically concise summation: "The lesson here for stock market investors is that hoping for a rate hike as a substitute for considered analysis is not a good strategy."

On Wednesday, the FOMC left its policy stance unchanged. This decision was consistent with the message sent after the previous meeting and was not contradicted by speeches given by FOMC participants in the intermeeting period. This action was also consistent with the consensu...

January 2, 2019

Paris | In this issue of The Institutional Risk Analyst, we feature a timely comment from Robert Eiesenbeis, Vice Chairman & Chief Monetary Economist at Cumberland Advisors in Sarasota, FL.  Dr. Eisenbeis was formerly Executive Vice-President and Director of Research at the Federal Reserve Bank of Atlanta.  While explaining the market mechanics of the Fed's balance sheet manipulations over the past few years, he makes a key point, namely that the increase in the federal deficit is the main driver of rising interest rates and widening credit spreads.

"Treasury is the driver here and all the had wringing about shrinkage in the Fed’s balance sheet is missing the gorilla in the room," he opines. Perhaps President Donald Trump sho...

December 6, 2018

Charleston | In this issue of The Institutional Risk Analyst, we feature an important comment by Robert Eisenbeis, PhD., Vice Chairman & Chief Monetary Economist at Cumberland Advisors.  Eisenbeis raises a key question at the end of his commentary, namely whether the Federal Open Market Committee is going to run down the level of excess reserves back to pre-crisis levels.  Should the FOMC refuse to allow the extraordinary levels of excess reserves to run off, then it implies the permanent nationalization of the short-term credit markets in the US by the Federal Reserve Board. 

In another week the FOMC will have its final meeting of 2018 and its last with the current mix of policy makers. Already, the discussion...

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