The FDIC has just released its Quarterly Banking Profile (QBP) for the second quarter of 2010, showing improvement in bank balance sheets since last quarter and at the same point last year.
While a great deal of attention has been given to Federal Reserve Chairman Ben Bernanke’s address in Jackson Hole, Wyoming on Friday, the remarks provided that day by his trans-Atlantic counterpart, European Central Bank President Jean-Claude Trichet, deserve equal, if not more, attention. Trichet highlighted the need for “ambitious” fiscal consolidation in promoting the global economic recovery.
Credit-rating agency Standard & Poor’s has a message to U.S. policymakers: We are watching you on the growing national debt.
House Republican Leader John Boehner (R-OH) gave an economic speech today that was billed as setting the policy table if Republicans gain control of the House in November. If so, the table needs some more place settings.
Since economic assumptions have such a big effect on fiscal projections, we have compared their new assumptions in the Updated Budget and Economic Projections to their previous assumptions and to OMB's projections in the Mid-Session Review (click here for an analysis of the MSR).
The Obama Administration held a conference yesterday discussing how to fix federal housing programs, with the goal of submitting a comprehensive Fannie Mae and Freddie Mac reform proposal by January.
With heated public debate and growing uncertainty about the momentum of the economic recovery, all eyes turned to the scheduled meeting of the Federal Reserve's monetary policy body (the FOMC) this week. Press reports that the Fed was reconsidering its exit strategy of unwinding its balance sheet had already come out on the heels of recent disappointing government reports (a disappointing slowdown in GDP growth from 3.7% the first quarter to 2.4% in the second quarter; weak labor market numbers in June and July; continuing signs of trouble in housing; plus persistent tight credit).
Yesterday, the House passed the $26 billion bill that would extend increased Medicaid matching to states and education funding to prevent teacher layoffs. The cost of the bill will be fully offset, a great move by Congress given the debacle with HR 4213.
Our policymakers need to focus more how shaping and managing fiscal expectations can help us get our fiscal house in order while supporting growth at the same time. (Hint: No, it’s not magic. It’s thoughtful policy design – which basically means taking great care with timing and composition.)
Today’s disappointing employment report (unexpectedly, June was revised downward and July was weak) prompted a Treasury rally, attributed by the financial press to safe haven flight once again. Deflation concerns however may have also driven investors. With prices rising for the benchmark 10-year note (and for most maturities), yields headed even lower on Friday after drifting downward most of the week.
