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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (86081)	8/26/2016 12:58:59 PM
From: yard_man	Read Replies (1) \| Respond to of 218653

Hardly any entertainment value here -- same ole -- same ole -- last part is TOO funny -- old bitty couldn't be ANY blinder -- what a DOOFUS with a capital D Of course, this analysis could be too optimistic. For one, the FRB/US simulations may overstate the effectiveness of forward guidance and asset purchases, particularly in an environment where long-term interest rates are also likely to be unusually low. In addition, policymakers could have less ability to cut short-term interest rates in the future than the simulations assume. By some calculations, the real neutral rate is currently close to zero, and it could remain at this low level if we were to continue to see slow productivity growth and high global saving.23 If so, then the average level of the nominal federal funds rate down the road might turn out to be only 2 percent, implying that asset purchases and forward guidance might have to be pushed to extremes to compensate.24 Moreover, relying too heavily on these nontraditional tools could have unintended consequences. For example, if future policymakers responded to a severe recession by *announcing their intention to keep the federal funds rate near zero* *for a very long time after the economy had substantially recovered* *and followed through on that guidance, then they might* *inadvertently encourage excessive risk-taking and so undermine* *financial stability.*