Tag: stimulus

Yellen Joins The Party

Posted on by George Yacik

When then-President-Elect Joe Biden nominated Janet Yellen to be his Treasury secretary last month, the markets rejoiced. The former Federal Reserve chair was a known quantity, and investors hate uncertainty – they knew what they were getting. Even better, they liked what they were getting—a monetary dove who favors low-interest rates and supports an interventionist government and Fed. While she wouldn't be on the Fed in her new role, she still holds the same views.

Moreover, since she is Jerome Powell's immediate predecessor, and they both worked together on the Fed for several years, it was pretty much a given that the two will work closely and harmoniously together for the good of the country, as the times demand.

But the markets were also relieved that Biden did not bow to the so-called progressives on the extreme left of his party and pick someone more to their liking, instead choosing someone with safe, relatively moderate views that both parties could support – as indeed they did, by an 84-15 Senate vote. In other words, Biden wanted – and the markets demanded – an adult in the room, and that's what they got with Yellen.

Or did they? Continue reading "Yellen Joins The Party" →

Is More Stimulus A Slam Dunk?

Posted on by George Yacik

If there were any doubts about whether more federal helicopter money would be falling from the sky, those doubts should have been erased by several major events that happened last week.

The latest event—which likely sealed the deal—was the December jobs report, which showed the economy losing 140,000 jobs, the first drop in payrolls since last April. If Congress needed another reminder of how many people are still suffering out there and that more help is needed, that should do it.

The second event was the Democrats prevailing in the special elections for Georgia's two Senate seats, giving the party an effective majority in that body to continue holding on the House. On paper, of course, both parties have 50 seats in the Senate. But let's not forget that Vice President Kamala Harris will hold the tie-breaking vote.

But her vote probably won't be needed in the current political environment. While the Democrat majority seems razor-thin, if existent at all, we can be fairly certain that votes in favor of more stimulus will be much greater than that and bipartisan, thanks to the riot on Capitol Hill on Thursday. In light of what happened, how many Republicans do you think will be brave enough to vote against the Democrats on just about anything, particularly more stimulus checks, which many of them already favor? Continue reading "Is More Stimulus A Slam Dunk?" →

Fed to keep up stimulus

Posted on by The INO.com Team

The Federal Reserve said Wednesday that the U.S. economy "paused" in recent months because of temporary factors and reaffirmed its commitment to try to stimulate growth by keeping borrowing cheap for the foreseeable future.

The Fed took no new action at its two-day policy meeting. But it stood behind aggressive steps it launched in December to try to reduce unemployment, in a statement released after the meeting.

Last month the Fed said it would keep its key short-term interest rate at a record low at least until unemployment falls below 6.5 percent. The rate is currently 7.8 percent.

And it said it would keep buying $85 billion a month in Treasurys and mortgage bonds to try to keep borrowing costs low and encourage spending. Continue reading "Fed to keep up stimulus" →