Monthly Archives: March 2013

Robin Harding

Goldman Sachs is still the Fed’s favourite counterparty for buying and selling Treasuries – or at least it was in the first quarter of 2011. The data comes out two years in arrears and we are now at the period when $600bn of QE2 purchases were in progress.

Goldman got twice as much of that business as anybody else, which is mildly embarrassing for the New York Fed, but reflects the pecking order in the Treasury market. If you know what happened to Citi’s business during that period then please explain in comments. Read more

Chris Giles

In late February, the Office for National Statistics decided to classify the Treasury’s raid on the Bank of England’s accumulated interest payments from quantitative easing as a receipt for the public sector.

You can have a long and reasonable argument on whether the raid, euphemistically called a “cash management operation”, is a good idea. But I argued a few days later that the treatment of an internal public sector transfer of money as government revenue in the headline figures was a poor decision by the Office for National Statistics. There was no world in which the underlying public finances had been improved by the move, I argued.

As a journalist I was appalled that Britain’s independent statistical authority was setting out a legalistic argument for an economic question and for a set of statistics that were not governed by international conventions. I felt the statistics for borrowing and debt could not be trusted any more.

As a member of the public, I wrote to the chairman of the UK Statistical Authority, the statistics watchdog, to ask for a review of the ONS decision (email reproduced below). Today, I received a reply from Andrew Dilnot, the UKSA chairman (also reproduced). I am delighted to say the UKSA thinks I raised important points and has set up a short review. Read more

The UK economy is at a standstill and opinions on how to get it going are divided. Should we rely on an aggressive monetary policy or is it time to borrow more and invest? Martin Wolf, chief economics commentator, and Chris Giles, economics editor, put forward their opposing views on what George Osborne’s Budget needs to deliver. Who do you think is right?

With the Eurozone wobbling, the European Central Bank and the Bank of England are holding policy meetings as they increase efforts to revive the economy.

By Lina Saigol, Tom Burgis and Ben Fenton with contributions from FT correspondents. All times are GMT.

 

Robin Harding

Today’s speech by Janet Yellen is a mirror of Ben Bernanke last week when it comes to the costs and risks of continued asset purchases. “At this stage, I do not see any [risks] that would cause me to advocate a curtailment of our purchase program,” she says.

Where Ms Yellen, the Fed vice chair, breaks some new ground is on the definition of a “substantial improvement” in the labour market.

A reminder: the Fed says it will keep on buying assets, currently at a pace of $85bn a month, until it gets that substantial improvement. Ms Yellen sets out five measures which basically form a Fed dashboard for the labour market. Here they are: Read more