1. See my profile on LinkedIn. My firm’s website is www.yardeni.com.

2. Board of Governors of the Federal Reserve System, “Open market operations” webpage. See also Federal Reserve Bank of New York, “Open Market Operations” webpage.

3. Martin Zweig, Winning on Wall Street (New York: Warner Books, 1986), 42–43.

Chapter 1

4. Board of Governors of the Federal Reserve System, Monetary Policy Report webpage (linking reports 1996–present).

5. Jon R. Moen and Ellis W. Tallman, “The Panic of 1907,” Federal Reserve History webpage.

6. Board of Governors of the Federal Reserve System, “Federal Reserve Act” webpage.

7. Aaron Steelman. “Employment Act of 1946,” Federal Reserve History webpage.

8. Aaron Steelman, “The Federal Reserve’s ‘Dual Mandate’: The Evolution of an Idea,” Federal Reserve Bank of Richmond, Economic Brief, December 2011.

9. By law, Board appointments must yield a “fair representation of the financial, agricultural, industrial, and commercial interests and geographical divisions of the country,” and no two governors may come from the same Federal Reserve District.

10. Board of Governors of the Federal Reserve System, “Who are the members of the Federal Reserve Board, and how are they selected?” webpage.

11. The rotating seats are filled from the following four groups of Federal Reserve Banks, with one bank president from each group: Boston, Philadelphia, and Richmond; Cleveland and Chicago; Atlanta, St. Louis, and Dallas; and Minneapolis, Kansas City, and San Francisco.

12. The Fed district presidents are chosen by a search committee composed of the regional banks’ directors. Once a candidate is formally appointed, he or she must be approved by the Board of Governors.

13. “A Short History of FOMC Communication,” Dallas Federal Reserve Bank, September 2013.

14. See, for example, Board of Governors of the Federal Reserve System, “Implementation Note,” July 31, 2019 press release.

15. Board of Governors of the Federal Reserve System, “The Discount Rate” webpage.

16. Board of Governors of the Federal Reserve System, “FOMC Meeting Calendars, Statements, and Minutes” webpage.

17. See, for example, “Summary of Economic Projections,” September 18, 2019.

18. In 1993, Representative Henry B. Gonzalez (a Democrat from Texas and chair of the House Banking Committee) attacked the FOMC’s disclosure policy on the grounds that the public deserved more detailed coverage of FOMC meetings. In response, the Federal Reserve instituted its current minutes policy and subsequently released historical transcripts, after light editing, with a five-year lag.

19. Yardeni Research, “FOMC Statements” (since 1997) webpage.

Chapter 2

20. Rich Miller, “Yalies Yellen-Hamada Put Tobin Twist Theory to Work in QE,” Bloomberg, October 31, 2013.

21. The model was developed by John Hicks in 1937 and later extended by Alvin Hansen. It remains the leading framework shown in macroeconomic textbooks, as it has been since the 1940s.

22. “Rahm Emanuel on the Opportunities of Crisis,” The Wall Street Journal, November 18, 2008.

23. If Emanuel’s advice seems Machiavellian, well, it is. Sixteenth-century Italian political theorist Niccolò. Machiavelli advised in his famous treatise The Prince: “Never waste the opportunity offered by a good crisis.” However, it was Winston Churchill who reputedly popularized the sentiment.

24. Board of Governors of the Federal Reserve System, “Meet the Economists” webpage.

25. Justin Fox, “How Economics PhDs Took Over the Federal Reserve,” Harvard Business Review, February 3, 2014.

26. Ben S. Bernanke, “On Milton Friedman’s Ninetieth Birthday,” November 8, 2002 speech at the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois.

27. Board of Governors of the Federal Reserve System, “Board of Governors Members: 1914–Present” webpage.

28. Robert L. Hetzel and Ralph F. Leach, “The Treasury-Fed Accord: A New Narrative Account,” Federal Reserve Bank of Richmond Economic Quarterly, Winter 2001.

29. Binyamin Appelbaum, The Economists’ Hour (New York: Little, Brown and Company, 2019).

30. See the transcript of Martin’s “Address before the New York Group of the Investment Bankers Association of America,” October 19, 1955.

31. Paul A. Volcker and Christine Harper, Keeping At It (New York: PublicAffairs, 2018).

Chapter 3

32. Arthur F. Burns and Wesley C. Mitchell, Measuring Business Cycles (National Bureau of Economic Research, 1946).

33. The NBER’s Business Cycle Dating Committee webpage.

34. “Arthur F. Burns Is Dead at 83; A Shaper of Economic Policy,” The New York Times, June 27, 1987.

35. Michael Bryan, “The Great Inflation: 1965–1982,” Federal Reserve History webpage.

36. Binyamin Appelbaum, The Economists’ Hour (New York: Little, Brown and Company, 2019).

37. FOMC Statement, November 21, 1978.

38. President Jimmy Carter, “Crisis of Confidence,” July 15, 1979 speech.

39. Ezra Klein, “Jimmy Carter’s ‘Malaise’ Speech Was Popular!” The Washington Post, August 9, 2013.

40. Binyamin Appelbaum and Robert D. Hershey Jr., “Paul A. Volcker, Fed Chairman Who Waged War on Inflation, Is Dead at 92,” The New York Times, December 9, 2019.

Chapter 4

41. William Safire, Before the Fall: An Inside View of the Pre-Watergate White House, (New York: Doubleday & Company, Inc., 1975).

42. Paul A. Volcker and Christine Harper, Keeping At It (New York: PublicAffairs, 2018).

43. FOMC Minutes, August 14, 1979. The minutes specified a range of 10 3/4% to 11 1/4%.

44. FOMC transcript, October 6, 1979.

45. Binyamin Appelbaum and Robert D. Hershey Jr., “Paul A. Volcker, Fed Chairman Who Waged War on Inflation, Is Dead at 92,” The New York Times, December 9, 2019.

46. The original Saturday Night Massacre occurred on October 20, 1973, when Nixon ordered the firing of the special prosecutor investigating Watergate by his attorney general, who resigned rather than do so.

47. For more on Volcker’s impactful October 6, 1979 monetary policy announcement, see the Federal Reserve Bank of San Francisco’s December 3, 2004 Economic Letter titled simply “October 6, 1979.” Also, see the collection of articles on this subject in the Federal Reserve Bank of St. Louis Review, March/April 2005.

48. The Dating Committee of the National Economic Bureau determined that there was a mini-recession from January to July 1980 followed by a brief expansion and another recession from July 1981 to November 1982. For most Americans, this “double-dip recession” felt like one long one. In his memoir, Volcker blamed the mini-recession on credit controls that the Carter administration had told the Fed to implement. The controls were terminated in July 1980.

49. Andrew Tobias, “A Talk With Paul Volcker,” The New York Times, September 19, 1982.

50. Robert J. Cole, “Wall St. Securities Firm Files for Bankruptcy,” The New York Times, August 13, 1982.

51. Market index values have been rounded to the nearest whole number at most mentions throughout the book.

52. FOMC transcript, October 5, 1982.

53. FOMC transcript, November 16, 1982.

54.  Robert L. Hetzel, “What Remains of Milton Friedman’s Monetarism?” Federal Reserve Bank of Richmond working paper, July 13, 2017.

55. Renee Haltom, “Failure of Continental Illinois,” Federal Reserve History webpage.

56. FOMC transcript, May 21–22, 1984.

57. William R. Neikirk, “Volcker Resigns as Fed Chief,” Chicago Tribune, June 3, 1987.

58. William L. Silber, Volcker, (New York: Bloomsbury Press, 2012).

59. Paul Volcker’s remarks at The Wall Street Journal’s Future of Finance conference, December 14, 2009.

Chapter 5

60. Nathaniel C. Nash, “Senate, by 91 to 2, Backs Greenspan as Fed Chief,” The New York Times, August 4, 1987.

61. Jim McTague, “Dr. Greenspan’s Amazing Invisible Thesis,” Barron’s, March 31, 2008.

62. Jim McTague, “Looking at Greenspan’s Long-Lost Thesis,” Barron’s, April 28, 2008.

63. See Alan Greenspan, “Trade Deficit and Budget Deficit,” C-SPAN video of a speech delivered at the Economic Club of New York, New York, June 14,1988 (quoted remark is 3 minutes, 20 seconds into the video).

64. Bob Woodward, Maestro: Greenspan’s Fed and the American Boom (New York: Simon & Schuster Paperbacks, 2001).

65. I wrote about this in “That M&A Tax Scare Rattling the Markets,” The Wall Street Journal, October 28, 1987.

66. For more details, see Mark Carlson, “A Brief History of the 1987 Stock Market Crash,” Board of Governors of the Federal Reserve System, November 2006.

67. Alan Greenspan, February 2, 1988 congressional testimony before the Committee on Banking, Housing & Urban Affairs, United States Senate.

68. Alan Greenspan, “The Challenge of Central Banking in a Democratic Society,” December 5, 1996 speech at the Annual Dinner and Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research, Washington, D.C.

69. Alan Greenspan, “The Federal Reserve’s semiannual monetary policy report,” July 22, 1997 congressional testimony before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate.

70. Edward Yardeni, “The Technology Lottery,” Topical Study, November 22, 1999.

71. Laurence H. Meyer, A Term at the Fed: An Insider’s View  (New York: HarperCollins Publishers, 2006), pages 6 and 16.

72. Meyer, page 18.

73. Meyer, page 38. The term “NAIRU” was first used by James Tobin in 1980. If the unemployment rate is at NAIRU, inflation should remain stable. According to this model, inflation should rise (fall) if the jobless rate remains below (above) NAIRU for a while.

74. Meyer, page 135.

75. Meyer, page 132.

76. Meyer, page 126.

77. Alan Greenspan, “Monetary policy and the economic outlook,” June 17, 1999 congressional testimony before the Joint Economic Committee, U.S. Congress, June 17, 1999.

78. Ben Bernanke, “Deflation: Making Sure ‘It’ Doesn’t Happen Here,” November 21, 2002 speech.

79. Alan Greenspan, “Risk and Uncertainty in Monetary Policy,” January 3, 2004 speech at the Meetings of the American Economic Association, San Diego, California.

80. Alan Greenspan, “Federal Reserve Board’s Semiannual Monetary Policy Report to the Congress,” February 16, 2005 congressional testimony before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate.

81. Ben Bernanke, “The Global Saving Glut and the U.S. Current Account Deficit,” March 10, 2005 speech.

82. Ben Bernanke, “Why Are Interest Rates So Low, Part 3: The Global Savings Glut,” April 1, 2015 blog post.

83. Alan Greenspan, February 17, 2009 speech before The Economic Club of New York.

84. See The Board of Governors of the Federal Reserve System, “Application of the Commodity Exchange Act to Transactions in Over-the-Counter Derivatives,” June 10, 1998 statement submitted before the House of Representatives Agricultural Committee’s Subcommittee on Risk Management and Specialty Crops.

85. Alan Greenspan, “The Regulation of OTC Derivatives,” July 24, 1998 congressional testimony before the Committee on Banking and Financial Services, US House of Representatives.

86. Alan Greenspan, “Over-the-Counter Derivatives,” February 10, 2000 congressional testimony before the Committee on Agriculture, Nutrition and Forestry, United States Senate.

87. A CDO is a complex structured finance product that is backed by a pool of loans and other assets. A CDS is a derivative that allows one investor to swap credit default risk with another investor. For more, see “Credit Derivatives: Basic Definitions.”

88. Alan Greenspan, “Understanding Household Debt Obligations,” February 23, 2004 speech at the Credit Union National Association 2004 Governmental Affairs Conference, Washington, D.C.

89. Alan Greenspan, “Risk Transfer and Financial Stability,” May 5, 2005 speech to the Federal Reserve Bank of Chicago’s Forty-first Annual Conference on Bank Structure, Chicago, Illinois.

90. In an essay for Fortune in December 2001, Warren Buffett said: “For me, the message of that chart is this: If the percentage relationship falls to the 70% or 80% area, buying stocks is likely to work very well for you. If the ratio approaches 200%—as it did in 1999 and a part of 2000—you are playing with fire.” During the latest bull market, Buffett remained bullish when his ratio rose back to 200% in 2017, observing that historically low inflation and interest rates were major considerations.

91. Alan Greenspan, Testimony before the Financial Crisis Inquiry Commission, April 7, 2010.

92. See “Testimony of Dr. Alan Greenspan,” October 23, 2008 before the US House of Representatives’ Committee of Government Oversight and Reform. The Q&A portion is available in an October 24, 2008 Washington Times article titled “He Found the Flaw?”

93. Alan Greenspan, February 17, 2009 speech before the Economic Club of New York.

94. “25 People to Blame for the Financial Crisis,” Time.

Chapter 6

95. Ben Bernanke, “The Great Moderation,” February 20, 2004 speech at the meetings of the Eastern Economic Association, Washington, D.C.

96. Milton Friedman and Anna Jacobson Schwartz, A Monetary History of the United States, 1867–1960, a study by the National Bureau of Economic Research (Princeton University Press, 1963).

97. Ben Bernanke, Essays on the Great Depression  (Princeton University Press, 2000).

98. Ben Bernanke, “On Milton Friedman’s Ninetieth Birthday,” November 8, 2002 remarks at the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois. In his first endnote, Bernanke wrote: “I hope the reader will forgive the many references to my own work in the list of references below. They arise because much of my own research has followed up leads from the Friedman-Schwartz agenda.”

99. Barry Eichengreen, “The Political Economy of the Smoot-Hawley Tariff,” NBER Working Paper No. 2001, August 1986.

100. Ben Bernanke, “The Federal Reserve and the Financial Crisis Origins and Mission of the Federal Reserve,” March 20, 2012 lecture.

101. See Roger Lowenstein’s article on Bernanke, “The Villain,” The Atlantic, April 2012.

102. Ben Bernanke, “Deflation: Making Sure ‘It’ Doesn’t Happen Here,” November 21, 2002 speech before the National Economists Club, Washington, D.C.

103. Ben Bernanke, “Japanese Monetary Policy: A Case of Self-Induced Paralysis?” January 9, 2000 speech at the ASSA meetings, Boston, Massachusetts.

104. Ben Bernanke, “The Subprime Mortgage Market,” May 17, 2007 speech at the Federal Reserve Bank of Chicago’s 43rd Annual Conference on Bank Structure and Competition, Chicago, Illinois.

105. Ben Bernanke, Semiannual Monetary Policy Report to the Congress, July 18, 2007 congressional testimony before the Committee on Financial Services, U.S. House of Representatives.

106. FOMC Statement, October 31, 2007.

107. FOMC transcript of Conference Call on January 9, 2008.

108. FOMC transcript of Conference Call on January 21, 2008.

109. “What the Financial Crisis Commission Concluded About AIG’s Failure,” Insurance Journal, January 27, 2011.

110. Board of Governors of the Federal Reserve System, “Credit and Liquidity Programs and the Balance Sheet” and “Expired Policy Tools” webpages.

111. Yardeni Research, “Chronology of Fed’s Quantitative Easing & Tightening” webpage.

112. Board of Governors of the Federal Reserve System, “What were the Federal Reserve’s large-scale asset purchases?” webpage.

113. Ben Bernanke, “The Economic Outlook and Monetary Policy,” August 27, 2010 speech at the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming.

114. William Dudley, “The Outlook, Policy Choices and Our Mandate,” October 1, 2010 remarks at the Society of American Business Editors and Writers Fall Conference, City University of New York, Graduate School of Journalism, New York City.

115. Ben Bernanke, “What the Fed Did and Why: Supporting the Recovery and Sustaining Price Stability,” op-ed in The Washington Post, November 4, 2010.

116. Ben Bernanke, Press Conference, June 19, 2013.

117. FOMC Statement, September 18, 2013.

118. Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath (New York: W.W. Norton & Company, Inc., 2015).

119. Ben Bernanke, “How the Fed Saved the Economy,” op-ed in The Wall Street Journal, October 4, 2015.

Chapter 7

120. Janet Yellen, “Yale Economics in Washington,” April 16, 1999 speech at Yale Economics Reunion New Haven, Connecticut.

121. Janet Yellen, Press Conference, March 19, 2014.

122. Janet Yellen, “What the Federal Reserve Is Doing to Promote a Stronger Job Market,” March 31, 2014 speech at the 2014 National Interagency Community Reinvestment Conference, Chicago, Illinois.

123. Jon Hilsenrath, “Janet Yellen’s Human Message Gets Clouded,” The Wall Street Journal, April 1, 2014.

124. George Akerlof won the 2001 Nobel Prize in economics mostly for his work on asymmetrical information in an article titled “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism,” published in the Quarterly Journal of Economics in 1970. He shared the prize with Michael Spence and Joseph Stiglitz for their research related to asymmetric  information.

125. Nicholas Lemann, “The Hand on the Lever,” The New Yorker, July 21, 2014.

126. Ann Saphir, “Fed’s Williams says sees ‘smidgen’ slower rate hikes,” Reuters, January 29, 2016.

127. My PhD dissertation at Yale was titled A Portfolio-Balance Model of Corporate Finance (1976).

128. Janet Yellen, “Macroeconomic Research After the Crisis,” October 14, 2016 speech at “The Elusive ‘Great’ Recovery: Causes and Implications for Future Business Cycle Dynamics” 60th annual economic conference sponsored by the Federal Reserve Bank of Boston, Boston, Massachusetts.

129. Board of Governors of the Federal Reserve System, Beige Book webpage.

130. See Yardeni Research chart book Regional Business Surveys.

131. The Fed’s website explains: “The Federal Reserve generally conducts the survey quarterly, timing it so that results are available for the January/February, April/May, August, and October/ November meetings of the Federal Open Market Committee. The Federal Reserve occasionally conducts one or two additional surveys during the year. Questions cover changes in the standards and terms of the banks’ lending and the state of business and household demand for loans. The survey often includes questions on one or two other topics of current interest.” See the Fed’s “Senior Loan Officer Opinion Survey on Bank Lending Practices.”

132. See “Monetary Policy Rules and Their Role in the Federal Reserve’s Policy Process,” pp. 36–39 in the Fed’s Monetary Policy Report, July 2017.

Chapter 8

133. Jerome Powell, Semiannual Monetary Policy Report to the Congress, February 27, 2018 congressional testimony before the Committee on Financial Services, US House of Representatives, Washington, D.C.

134. Federal Reserve Bank of Atlanta, Taylor Rule Utility webpage.

135. Jerome Powell, Press Conference, March 21, 2018.

136. Lael Brainard, “What Do We Mean by Neutral and What Role Does It Play in Monetary Policy?” September 12, 2018 speech at the Detroit Economic Club, Detroit, Michigan.

137. FOMC Minutes, September 25–26, 2018.

138. “Fed Chair Jay Powell: U.S. may be in a different era for workers’ wages despite economic gains,” PBS Newshour.org, October 3, 2018. Quoted remark is 11 minutes, 17 seconds into the videotape of the interview.

139. Federal Reserve Bank of Dallas, “Global Perspective with Jerome H. Powell,” November 14, 2018.

140. Nick Timiraos, “Fed Shifts to a Less Predictable Approach to Policy Making,” The Wall Street Journal, November 27, 2018.

141. Richard H. Clarida, “Data Dependence and U.S. Monetary Policy,” September 27, 2018 speech at The Clearing House and The Bank Policy Institute Annual Conference, New York, New York.

142. Jerome Powell, “The Federal Reserve’s Framework for Monitoring Financial Stability,” November 28, 2018 speech at The Economic Club of New York, New York, New York.

143. FOMC Minutes, November 7–8, 2018.

144. Jerome Powell, Press Conference, December 19, 2018.

145. Jeff Cox, “Watch the Powell, Bernanke and Yellen roundtable live,” CNBC, January 4, 2019.

146. Jerome Powell, Press Conference, January 30, 2019.

147. CNBC Exclusive: CNBC Transcript: Former Federal Reserve Chair Janet Yellen Speaks with CNBC’s Steve Liesman Today, February 6, 2019.

148. Jerome H. Powell, Semiannual Monetary Policy Report to the Congress, February 26, 2019 congressional testimony before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.

149. Jerome Powell, “Monetary Policy: Normalization and the Road Ahead,” March 8, 2019 speech at the 2019 SIEPR Economic Summit, Stanford Institute of Economic Policy Research, Stanford, California.

150. Here is the unrecognizable image Powell showed and the very recognizable image of the full painting.

151. Jerome Powell, “Opening Remarks,” June 4, 2019 speech at the Conference on Monetary Policy Strategy, Tools, and Communications Practices, Federal Reserve Bank of Chicago, Chicago, Illinois.

152. Jerome Powell, “Monetary Policy: Normalization and the Road Ahead,” March 8, 2019 speech at the 2019 SIEPR Economic Summit, Stanford Institute of Economic Policy Research, Stanford, California.

153. Jerome Powell, Press Conference, June 19, 2019.

154. FOMC Statement, June 19, 2019.

155. Jerome Powell, Semiannual Monetary Policy Report to the Congress, July 10, 2019 congressional testimony before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.

156. Jerome Powell, “Monetary Policy in the Post-Crisis Era,” July 16, 2019 speech at “Bretton Woods: 75 Years Later—Thinking about the Next 75,” a conference organized by the Banque de France and the French Ministry for the Economy and Finance, Paris, France.

157. John Williams, “Living Life Near the ZLB,” July 18, 2019 speech at 2019 Annual Meeting of the Central Bank Research Association (CEBRA), New York City.

158. Richard Clarida interview on Fox Business News, July 18, 2019.

159. Jerome Powell, “Monetary Policy in the Post-Crisis Era,” July 16, 2019, speech at “Bretton Woods: 75 Years Later—Thinking about the Next 75,” a conference organized by the Banque de France and the French Ministry for the Economy and Finance, Paris, France.

160. FOMC Statement, July 31, 2019.

161. Jerome Powell, Press Conference, July 31, 2019.

162. Christopher Condon, “Here’s a Timeline of Trump’s Key Quotes on Powell and the Fed,” Bloomberg, July 30, 2019.

163. Jeanna Smialek, “Trump Calls for Fed’s ‘Boneheads’ to Slash Interest Rates Below Zero,” The New York Times, September 11, 2019.

164. Alan S. Blinder, “When Presidents Pummel the Fed,” The Wall Street Journal, September 18, 2019. By the way, a President does not have the legal authority to fire a Fed chair, even if he or she appointed the person.

165. Jerome Powell, Press Conference, September 18, 2019.

166. Edward Yardeni and Melissa Tagg, “The Yield Curve: What Is It Really Predicting?” July 2019.

167. Daniel Kruger and Sam Goldfarb, “Junk-Bond Sale Ends 40-Day Market Drought,” The Wall Street Journal, January 10, 2019.

168. Fernando Avalos, Torsten Ehlers, and Egemen Eren, “September stress In dollar repo markets: passing or structural?” BIS Quarterly Review, December 8, 2019.

169. Jerome Powell, “Data-Dependent Monetary Policy in an Evolving Economy,” October 8, 2019 speech at “Trucks and Terabytes: Integrating the ‘Old’ and ‘New’ Economies,” the 61st Annual Meeting of the National Association for Business Economics, Denver, Colorado.

170. Board of Governors of the Federal Reserve System, “Balance Sheet Normalization Principles and Plans,” March 20, 2019 press release.

171. Board of Governors of the Federal Reserve System, “Statement Regarding Monetary Policy Implementation,” October 11, 2019 press release.

172. Federal Reserve Bank of New York, “Statement Regarding Treasury Bill Purchases and Repurchase Operations,” October 11, 2019.

Chapter 9

173. Ben Bernanke, “Communication and Monetary Policy,” November 19, 2013 speech at the National Economists Club Annual Dinner, Herbert Stein Memorial Lecture, Washington, D.C.

174. FOMC Statement, May 4, 2004.

175. FOMC Statement, December 13, 2005.

176. FOMC Statement, January 31, 2006 and FOMC Statement, March 28, 2006.

177. FOMC Statement, May 10, 2006.

178. FOMC Statement, June 29, 2006 and FOMC Statement, January 31, 2007.

179. FOMC Statement, September 18, 2007.

180. FOMC transcript of unscheduled conference call, January 21, 2008.

181. FOMC Statement, January 22, 2008.

182. FOMC Statement, April 30, 2008.

183. FOMC Statement, December 16, 2008.

184. FOMC Statement, September 23, 2009 and FOMC Statement, December 16, 2009.

185. FOMC Statement, June 22, 2011, FOMC Statement, August 9, 2011, FOMC Statement, January 25, 2012, and FOMC Statement, September 13, 2012.

186. FOMC Statement, December 12, 2012.

187. FOMC Statement, January 25, 2012.

188. FOMC Statement, January 30, 2013.

189. FOMC Statement, October 29, 2014.

190. FOMC Statement, October 28, 2015.

191. FOMC Statement, December 16, 2015.

192. FOMC Statement, January 30, 2019.

193. FOMC Statement, June 19, 2019.

194. Board of Governors of the Federal Reserve System, Timelines of Policy Actions and Communications: Forward Guidance about the Federal Funds Rate webpage.

Chapter 10

195. ECB, “Verbatim of the remarks made by Mario Draghi,” July 26, 2012 transcript of speech at the Global Investment Conference in London.

196. Mario Draghi, Press Conference, August 2, 2012.

197. ECB, “Technical features of Outright Monetary Transactions,” September 6, 2012 webpage.

198. ECB Governing Council, “Monetary policy decisions,” June 5, 2014. See also Yardeni Research, “Chronology of ECB Monetary Policy Actions: 2014–Present” webpage.

199. ECB, “Targeted longer-term refinancing operations (TLTROs)” webpage.

200. Longer-term refinancing operations were first introduced by the ECB during March 2008 with a six-month maturity. Twelve-month LTROs were provided during June 2009. During December 2011, three-year LTROs were issued with banks’ portfolios as collateral. A second auction of these loans occurred during February 2012.

201. “ECB announces expanded asset purchase programme,” January 22, 2015 ECB press release.

202. ECB, “Monetary policy decisions,” June 2, 2016.

203. Yardeni Research, “Chronology of ECB Monetary Policy Actions: 2014–Present” webpage.

204. ECB, “What is the expanded asset purchase programme?” March 31, 2016 webpage.

205. ECB, “Monetary policy decisions,” December 13, 2018.

206. Mario Draghi, Press Conference, April 26, 2018.

207. Mario Draghi, Press Conference, June 14, 2018.

208. Mario Draghi, Press Conference, December 13, 2018.

209. Mario Draghi, Press Conference, March 7, 2019.

210. Mario Draghi, Press Conference, June 6, 2019.

211. ECB Governing Council, “Account of the monetary policy meeting,” June 5–6, 2019.

212. Silvia Amaro, “Euro falls sharply as ECB’s Draghi clears path for more stimulus,” CNBC, June 18, 2019.

213. ECB Governing Council, “Account of the monetary policy meeting,” July 24–25, 2019.

214. Mario Draghi, Press Conference, September 12, 2019.

215. “Christine Lagarde Pledges to Review ECB’s Negative Rates,” The Wall Street Journal, September 4, 2019.

216. “ECB Launches Major Stimulus Package, Cuts Key Rate,” The Wall Street Journal, September 12, 2019.

217. Christine Lagarde, “The future of the euro area economy,” November 22, 2019 speech at the Frankfurt European Banking Congress.

218. Andy Sharp and Gonzalo Vina, “Kuroda Brings Oxford Mindset After Chicago-Alum Shirakawa,” Bloomberg, March 14, 2013.

219. BOJ, “Introduction of the ‘Quantitative and Qualitative Monetary Easing,’” April 4, 2013 press release on QQE program.

220. BOJ, “Expansion of the Quantitative and Qualitative Monetary Easing,” October 31, 2014 press release on the expansion of QQE program.

221. Takashi Nakamichi, “Bank of Japan’s Kuroda Channels Peter Pan’s Happy Thoughts,” The Wall Street Journal, June 4, 2015.

222. BOJ, “New Framework for Strengthening Monetary Easing: ‘Quantitative and Qualitative Monetary Easing with Yield Curve Control,’” September 21, 2016 press release.

223. Haruhiko Kuroda, “Japan’s Economy and Monetary Policy,” December 7, 2017 speech.

224. “TIMELINE-Missing the Target: A timeline of Kuroda-nomics,” Reuters, June 17, 2019.

225. IMF, Global Financial Stability Report, October 2019.

Chapter 11

226. “The ECB’s monetary policy strategy,” press release May 8, 2003.

227. “Bank of Japan sets 2% inflation target,” USA Today, January 22, 2013.

228. See the first footnote in the Federal Reserve Board’s Monetary Policy Report submitted to Congress on February 17, 2000.

229. Alan Greenspan, “Transparency in Monetary Policy,” October 11, 2001 speech at the Federal Reserve Bank of St. Louis, Economic Policy Conference, St. Louis, Missouri (via videoconference).

230. Ben S. Bernanke, Thomas Laubach, Frederic S. Mishkin, and Adam S. Posen, Inflation Targeting: Lessons from the International Experience (Princeton University Press, 1999).

231. Fed Governor Frederic S. Mishkin, “Comfort Zones, Shmumfort Zones,” March 27, 2008 speech.

232. “Federal Reserve issues FOMC statement of longer-run goals and policy strategy,” January 25, 2012 press release.

233. Brendan Greeley, “US Federal Reserve considers letting inflation run above target,” Financial Times, December 2, 2019.

234. Lael Brainard, “Federal Reserve Review of Monetary Policy Strategy, Tools, and Communications: Some Preliminary Views,” November 26, 2019 speech at the Presentation of the 2019 William F. Butler Award New York Association for Business Economics, New York, New York.

235. Joseph Schumpeter, Capitalism, Socialism and Democracy (1942).

236. Federal Reserve Bank of Dallas, “Technology-Enabled Disruption: Implications for Business, Labor Markets and Monetary Policy,” May 22–23, 2019 conference agenda.

237. Federal Reserve Bank of Dallas, “Technology-Enabled Disruption: Implications for Business, Labor Markets and Monetary Policy,” May 22–23, 2019 conference overview.

238. Jerome Powell, “Monetary Policy in the Post-Crisis Era,” July 16, 2019 speech at “Bretton Woods: 75 Years Later—Thinking about the Next 75,” a conference organized by the Banque de France and the French Ministry for the Economy and Finance, Paris, France.

239. Daniel K. Tarullo, “Monetary Policy Without a Working Theory of Inflation,” October 4, 2017 speech at the Hutchins Center on Fiscal & Monetary Policy at Brookings.

240. Claudio Borio, “Through the Looking Glass,” September 22, 2017 speech at the Official Monetary and Financial Institutions Forum in London.

Chapter 12

241. Brian Blackstone, “Negative Rates, Designed as a Short-Term Jolt, Have Become an Addiction,” The Wall Street Journal, May 20, 2019.

242. Mario Draghi, Press Conference, July 25, 2019.

243. Jens H.E. Christensen and Mark M. Spiegel, “Negative Interest Rates and Inflation Expectations in Japan,” FRBSF Economic Letter, August 26, 2019.

244. Takashi Nakamichi, “Bank of Japan Faces a New Opponent on Negative Rates: Main Street,” The Wall Street Journal, February 18, 2016.

245. Phil Molyneux, Alessio Reghezza, John Thornton, and Ru Xie, “Did Negative Interest Rates Improve Bank Lending?” Journal of Financial Services Research, July 30, 2019.

246. Phil Molyneux, Alessio Reghezza, John Thornton, and Ru Xie, “Bank margins and profits in a world of negative rates,” Journal of Banking & Finance, October 2019.

247. “Negative interest rate policies are backfiring–new research,” University of Bath, August 30, 2019.

248. FOMC Minutes, July 30–31, 2019.

249. “Federal Reserve to review strategies, tools, and communication practices it uses to pursue its mandate of maximum employment and price stability,” November 15, 2018 press release.

250. Jerome Powell, Press Conference, September 18, 2019.

251. Swedish Riksbank, “Repo rate raised to zero per cent,” December 19, 2019 press release.

252. Swedish Riksbank, Monetary Policy Report, December 19, 2019.

253. Board of Governors of the Federal Reserve System, Financial Accounts of the United States (current release). Especially useful are the links to all tables.

254. While it is widely believed that companies buy back their shares to boost their earnings per share and stock prices, Joseph Abbott and I found that most of this activity is driven by efforts to offset earnings dilution attributable to employee stock compensation plans. See our study  Stock Buybacks: The True Story (2019).

255. Board of Governors of the Federal Reserve System, Financial Stability Report, November 2018.

256. The forward P/E is the time weighted average of industry analysts’ consensus expectations for S&P 500 earnings during the current year and the coming year.

257. Board of Governors of the Federal Reserve System, Financial Stability Report, May 2019.

258. Board of Governors of the Federal Reserve System, Financial Stability Report, May 2019, p. 22.

259. Board of Governors of the Federal Reserve System, Financial Stability Report, November 2019, p. 28.

260. Jerome Powell, Press Conference, October 30, 2019.

261. S&P Global, “U.S. Corporate Debt Market: The State Of Play In 2019,” May 17, 2019.

262. IMF, Global Financial Stability Report: Lower for Longer, October 2019.

263. Fed’s Yellen expects no new financial crisis in ‘our lifetimes’, Reuters, June 27, 2017.

264. In his 2015 memoir, The Courage to Act, Bernanke lamented: “The deflation speech saddled me with the nickname ‘Helicopter Ben.’ In a discussion of hypothetical possibilities for combating deflation I mentioned  an extreme tactic—a broad-based tax cut combined with money creation by the central bank to finance the cut. Milton Friedman had dubbed the approach a ‘helicopter drop’ of money. Dave Skidmore, the media relations officer . . . had advised me to delete the helicopter-drop metaphor . . . ‘It’s just not the sort of thing a central banker says,’ he told me. I replied, ‘Everybody knows Milton Friedman said it.’ As it turned out, many Wall Street bond traders had apparently not delved deeply into Milton’s oeuvre.”

265. Ben Bernanke, “What tools does the Fed have left? Part 3: Helicopter money,” April 11, 2016 Brookings post, April 11, 2016.

266. Ben Bernanke, “Deflation: Making Sure ‘It’ Doesn’t Happen Here,” November 21, 2002 speech before the National Economists Club, Washington, D.C.

267. Elga Bartsch, Jean Boivin, Stanley Fischer, and Philipp Hildebrand, “Dealing with the next downturn: From unconventional monetary policy to unprecedented policy coordination,” BlackRock Investment Institute, August 2019.

268. See the transcript of Martin’s “Address before the New York Group of the Investment Bankers Association of America,” October 19, 1955.