{"id":20760,"date":"2015-05-16T13:13:54","date_gmt":"2015-05-16T17:13:54","guid":{"rendered":"http:\/\/ssgreenberg.name\/PoliticsBlog\/?p=20760"},"modified":"2015-05-16T13:13:54","modified_gmt":"2015-05-16T17:13:54","slug":"exit-strategy-part-one-zero-interest-rate-ppolicy-of-the-fed","status":"publish","type":"post","link":"https:\/\/ssgreenberg.name\/PoliticsBlog\/2015\/05\/16\/exit-strategy-part-one-zero-interest-rate-ppolicy-of-the-fed\/","title":{"rendered":"Exit Strategy, Part One: Z(ero) I(nterest) R(ate) P(policy) of the Fed"},"content":{"rendered":"

Naked Capitalism<\/em> has the article Exit Strategy, Part One: ZIRP<\/a>.<\/p>\n

\n

The Fed has announced plans<\/a> to raise rates in the imminent future, but the market does not believe it.  Why not?  Conventional wisdom appears to be that the Fed will chicken out, just as it did during the so-called Taper Tantrum.  The Fed has signaled its appreciation that \u201cliftoff\u201d will involve increased volatility, and has stated its resolve this time simply to let that volatility happen, but markets don\u2019t believe it.<\/p>\n

I want to suggest a slightly different source of disconnect, concerning expectations about what exactly will happen in the monetary plumbing when the Fed raises rates. <\/p>\n<\/blockquote>\n

Some of it is reasonably easy to understand if you have a little knowledge of the Fed and finance. Other parts may require more knowledge to understand.<\/p>\n

Here is my explanation of why this article is important to read, even if you don’t understand all of it in detail.<\/p>\n

I hark back to what our <sarcasm>beloved<\/sarcasm> ex Secretary of Defense, Donald Rumsfeld, once said.<\/p>\n

\n
    \n
  1. There are things we know.<\/li>\n
  2. There are things we know that we don’t know.<\/li>\n
  3. And there are things that we don’t know that we don’t know<\/li>\n<\/ol>\n<\/blockquote>\n

    It is worthwhile to read an article that can move things from category 3 above into category 2. That is the best chance you have of ever getting them into category 1.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Naked Capitalism has the article Exit Strategy, Part One: ZIRP. The Fed has announced plans to raise rates in the imminent future, but the market does not believe it.  Why not?  Conventional wisdom appears to be that the Fed will chicken out, just as it did during the so-called Taper Tantrum.  The Fed has signaled […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":{"0":"post-20760","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-stevegsposts","7":"czr-hentry"},"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/20760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=20760"}],"version-history":[{"count":1,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/20760\/revisions"}],"predecessor-version":[{"id":20761,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/20760\/revisions\/20761"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=20760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=20760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=20760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}