Rolfe Winkler

Fed asks for new powers

By Reuters Staff
May 8, 2008

For Central Banking junkies out there, Grep Ip is the journalist you need to read. He covers all things Fed for the WSJ. Yesterday he published a fascinating article about the Fed’s request to start paying interest on reserves held in its vaults. This would give the Fed yet more power to control the money supply, and would help avoid the consequence of pushing the Federal Funds rate toward 0% if they’re forced to act more aggressively to pump liquidity into the markets (see Economic Busts: Japan, circa the last 18 years).  It would probably also discourage banks from hiding assets in off balance sheet vehicles.  The more assets banks have ON the balance sheet, the more 0% interest reserves they must park at the Fed.

NYT: Fannie/Freddie fears spreading

By Reuters Staff
May 7, 2008

Good to see the NYT jumping on board the argument I made in January on the op-ed page of the Baltimore Sun (hat tip JJW) (update: the CS Monitor is joining the bandwagon too–hat tip Patrick). A snippet from the NYT piece: