Paul Kasriel Quotes (77 Quotes)

I've thought there would be some moderation in consumer spending this year, but I also thought that job growth would be better at this point than it has been. It may be that consumer spending will moderate even more than what I'm forecasting.

There are a lot of crosscurrents now, but falling yields might indicate that demand for credit is slowing down and that the Fed, by holding the fed funds rate where it is, is actually keeping rates all along the curve from falling to their equilibrium level, or to the level where would they would more naturally go,

In most periods throughout history, households were net suppliers of money to the economy, ... Today, by a record amount, they are net borrowers from the rest of the economy.

The Fed is a price fixer it fixes the price of short-term credit. If there's an increase in demand for credit, interest rates want to rise. But because the Fed is fixing the price of credit to keep rates from rising, it has to create more reserves or allow banks to create more money, and that's what leads to bubbles.

To me, a cut now would just entice households to go deeper into debt, and that game has a limit to it.

What the Fed has done in the past two years has driven us deeper into debt, ... and since I think that is one of the issues ailing the economy now, I don't see going deeper into debt as a cure.

I think there are some members who would prefer that the funds rate be at 3 percent, but I suspect there is a little concern about moving too fast and upsetting the household sector.

Since central banks aren't letting their currencies appreciate against the dollar, that implies that all the currencies will depreciate against gold and commodities in general.

There may be somebody else taking the baton now, which is not unusual in a recovery. Housing is typically the leader out of the desert to the promised land but, just like Moses didn't make it to the promised land, as rates rise, housing doesn't quite make it, either. Other sectors do.

This reflects the low interest rates we saw earlier in the summer. While I wouldn't say that a major contraction is imminent yet, I suspect this is close to being the last hurrah.

Economists are notoriously bad at predicting turning points. They're like credit ratings agencies, they don't anticipate things very well.

The creation of credit by the Fed, just like the scrip printed by a counterfeiter, does not result in the increased supply of energy.

When the fog of war is finally lifted, we may find that economic growth remains weak because monetary policy turns out to be less accommodative than the Fed thought.

Households have not meaningfully repaired their balance sheets since the onset of the last recession. Households are not 'better positioned' than they were earlier to boost outlays as their wariness about the economic environment abates. If anything, they are more poorly positioned to do so.

Basically we made a lot of ill-advised investments. We need to readjust the economy, and cheap credit isn't necessarily going to be the way to do that.

It seems that what it allows you to do is ... stay in business with somewhat of an unfair advantage over your competitors, who still do have to pay their debts and pay interest on those debts.

I have a firm belief in the marketplace, ... Every day, every seller, whether it's a seller of gasoline or a seller of services -- an employee --, wants to raise the price of his or her product, but they face competition. If I want a raise, but there's someone else out there willing to do my job for less, then my boss is going to tell me that if I want a raise, get on the elevator.

For the Bush administration, Hubbard is a good soldier, he's out there being a cheerleader and the Fed says everything's OK. But you can't see their hands behind their backs, with their fingers crossed.

If the Fed pauses here, rates will come down, the house ATM machine will get filled up again, and we can all go back and do more refinancing. But if they keep going, like some people believe they will, then we will have a recession in the second half of 2005.

If we have a rising unemployment rate, we're going to see some tightening in credit terms to the household sector, which has been keeping things going,

measure of the financial deficit that households are running at an annualized rate.

Fed policy-makers think their job now is to play a supporting role. They kind of want to drift into the background.

That, plus the fact that the Bank of Japan won't be buying as many Treasury and agency securities, will put upward pressure on rates.

We're not in a recession. We're not going to be in a recession. Recovery is on the horizon. The decks are clear. The economy is in direct drive,

In a longer-run sense, I would view it as marginally unproductive, a worsening of the trade-off between growth and inflation. But will we be able to detect that I doubt it.

Up until 2000, households in the post-War period had never experienced a decline in their net worth on a year-end to year-end basis, ... But they did in 2000, they did in 2001, and they're on course for it again in 2002.

O'Neill was like the offensive line of the Green Bay Packers playing in a dome -- they can't hear signals. O'Neill couldn't hear the signals the White House was sending, and they got rid of him. Presumably, Snow has better hearing.

When you print money, it's going to inflate some asset price. Maybe we'll revert to the late 1990s and buy stocks with it.

This is a warning signal ... that we are on recession watch now.

I guess you could (say) that the Fed sees the light at the end of the tunnel. They believe that they have taken a lot of accommodation out of policy now.

Deflation in the context of relatively strong economic growth is not a problem, but the concern is that growth is petering out, and there's not a lot of pricing power now.

There's nothing to suggest that payrolls are going to be particularly weak or strong. That's why the consensus estimate is so close to the average of the past six months.

OPEC doesn't suffer from money illusion. It decided they want an honest dollar for an honest barrel of oil.

We're in a situation where the economy is the most highly leveraged in the post-War period. If the Fed had to raise interest rates, that could bring the whole system down. And it's not clear that holding rates where they are or lowering them will save us from another recession.

Historically, movements like this have led to a slowdown in economic activity. While the relationship between money supply and economic growth has deteriorated, the basic qualitative relationship seems to have held up pretty well, so this is of some concern.

And rates are not likely to be adjusting downward. Households are paying about 13.75 percent of their aggregate tax income to service debt -- and it is going to go higher.

Housing has gotten very expensive relative to income.

All the data suggest the labor market is improving -- perhaps not as fast everyone would hope and want, but it's better than deteriorating.

The labor market is improving, optimism is improving and spirits will be higher this holiday season. Sales are going to better than OK, they're going to be good.

We could see corporations building up their inventories toward the end of 1999 for fear they won't be able to get goods in. They'll borrow to do that, and that will put upward pressure on interest rates as well.

You can't make it up on volume if you're borrowing at 4.25 percent and lending at 4 percent.

Nothing seems to be going quite right. We're not seeing mass defections. The weather has been bad. Frustrations are starting to build that this might be going into a less antiseptic phase.

It's almost become a random number.

Every time we think the bond market is acting irrationally, we usually find out a month or two later that it was rational, that some people participating in the bond market knew more than most of us economists did -- which is not really a great feat.

You can compare it to a corporation that issues stock and bonds and uses the money not for plant and equipment, but to throw a party for the employees.

He goes up to Congress, and they ask him questions about everything except monetary policy. It's unprecedented that a central banker is sort of viewed as an omniscient economic policy czar. It's not his responsibility.

Nobody wants a strong currency, and since the U.S. currency is fundamentally weak, foreign central banks need to buy up dollars to keep their currency from appreciating.

You're essentially renting from your bank with an option to buy,

The Fed is clearly not in the mood to preempt inflation. They're going to wait, and that ultimately will have some unpleasant ramifications.

The people that make the stuff say that things aren't getting better. But the data say different.