LONDON | By Michael Pond and Chirag Mirani at Barclays | Some at the Fed believe that a higher inflation target could be a good strategy, though one that is difficult to communicate. Instead, in our view, it has an implicit near-term tolerance for above-target inflation; forward breakevens should be higher as a result.
LONDON | By James Ball at The Guardian via Presseurop | British intelligence officials approved a US request to analyse and store the telephone, internet and email records of UK nationals, including those not suspected of any criminal activity, according to new documents released by former National Security Agency (NSA) contractor Edward Snowden.
SAO PAULO | By Marcus Nunes | The Fed minutes came out. The stock market didn’t appreciate it, at least immediately. Bernanke’s concept of “open and transparent” monetary policy is really something!
WASHINGTON | By Mike Konczal at the Rortybomb blog via The Next New Deal | Everyone has been talking about the recent Larry Summers speech on secular stagnation, written up with force by Paul Krugman here. Gavyn Davies, in his own nice coverage, noted that the Q&A had an interesting exchange about fiscal stimulus between Bernanke and Summers, so I decided to write that up.
NEW YORK | By Ana Fuentes | JP Morgan, the U.S. biggest bank, will have to pay a historic penalty of $13 billion over faulty mortgage practices, according to the settlement with the Department of Justice announced on Tuesday. That’s the equivalent of Iceland’s annual GDP, and more than three times the amount BP had to pay for the oil spill in the Gulf of Mexico in 2010. For some, it was about time that the administration started to take action against those who ignited the economic crisis. Others believe JP Morgan is just a scapegoat.
BEIJING | By Andy Xie at Caixin | Real reforms stripping speculators of their candy involve limiting government power in China. They are unlikely to come fast enough in this bubble economy.
MADRID | By Paul Krugman at Luis Arroyo’s Ilusión Monetaria | Looking at current macroeconomic policy, the obvious question is, stupid or evil? And the obvious answer is, why do we have to choose? But it is, I think worthwhile – or at any rate soothing – to think about the longer-term future for monetary and fiscal policy.
AMSTERDAM | By Stéphane Alonso at NRC Handelsblad via Presseurop | Negotiations on a free-trade agreement between Europe and the US will include discussions on an arbitration mechanism for the resolution conflicts between states and companies. However, in Brussels, there is growing criticism of systems that are already in operation, which too often find in favour of the companies.
By Benjamin Cole at Marcus Nunes’ Historinhas | Recently Federal Reserve Bank President Charles Plosser opined that even periods of mild deflation could be welcome in the United States, and that Fed should have but a lone goal, and ideally that is zero inflation.