Press releases and other resources for media.

18 05, 2022

American Banker, Bankshot Podcast, Wednesday, May 18, 2022

2022-05-19T12:13:44-04:00May 18th, 2022|Press Clips|

Should banks be more worried about World War III or Cold War II?

By John Heltman

Below is a lightly edited transcript of the podcast: JOHN HELTMAN: I’m doing a podcast about Russia and Ukraine. And I know that you have feelings about Russia and Ukraine, right?… KAREN PETROU: I think there’s no, no question in my mind that global finance is fragmented …HELTMAN: That’s Karen Petrou, managing partner at Federal Financial Analytics. PETROU: … along with global trade, and the increasingly tenuous institutions, like the World Trade Organization, are they relatively toothless, but hopeful institutions like the Financial Stability Board, these are going to be crumpling back into blocs — spelled B-L-O-C. With, as you pointed out, back to what I remember until the late 90s, you know, the US and its allies, Russia and its allies, and the non-aligned nations, China, India and some pretty significant emerging markets, playing everybody off to the greatest extent they could. These these systems depend on a completely … a friction free cross border financial system, which we don’t have.

https://www.americanbanker.com/podcast/should-banks-be-more-worried-about-world-war-iii-or-cold-war-ii

5 05, 2022

American Banker Bankshot Podcast: Thursday, May 5, 2022

2022-05-06T12:05:05-04:00May 5th, 2022|Press Clips|

By John Heltman

Decentralized finance, or DeFi, could revolutionize the way money works, how it is controlled and how its power is distributed. But is DeFi the future or hype? Click the link below to listen to Heltman’s conversation with Karen Petrou.

https://podcasts.apple.com/us/podcast/the-revolution-will-not-be-centralized/id1462201421?i=1000559654997

3 05, 2022

The Hill, Tuesday, May 3, 2022

2022-05-04T10:24:40-04:00May 3rd, 2022|Press Clips|

Fed expected to hike interest rates Wednesday

By Sylvan Lane

The Federal Reserve is racing to get inflation under control and pull back stimulus for an overheated economy with a double dose of rate hikes expected on Wednesday. The Fed’s monetary policy panel is expected to announce a 0.5 percentage point rate hike Wednesday, twice the size of a typical interest rate increase, as the bank rushes to get in front of rising prices….“What you try to do when you slow growth is reduce demand and that drops prices. How much it can drop prices when you already have abnormal supply shortages has never been tested before,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics. “The Fed can maybe make some difference, but the more of a difference it makes in demand, the more painful the recessionary risk becomes. That’s why this is so hard.”  Petrou is among many Fed-watchers who feared the bank ignored clear signs last year that inflation would not be “transitory,” as Powell often said, but had spread into areas of the economy largely unaffected by supply chain issues. While most of the initial bust of inflation came from a national automobile and computer chip shortage, prices for food, shelter, health care and other services have risen far faster in recent months.  “I don’t understand what was wrong with their models and I think it’s because they got the answer they wanted, which is a terrible way to think about the economy,” …

26 04, 2022

American Banker, Tuesday, April 26, 2022

2022-04-27T14:37:28-04:00April 26th, 2022|Press Clips|

Toomey’s quest to end Fed ‘mission creep’ could have legs

By Kyle Campbell

Sen. Pat Toomey, R-Pa., wants to reform the Federal Reserve Banks if it’s the last thing he does as an elected official. And he very well may succeed.

The ranking member on the Senate Banking Committee, who will not seek re-election this fall, has made it a priority for his final months in office to rein in what he describes as “mission creep” within the Fed’s 12 regional banks….The clearest example of this is the location of the 12 regional banks, which reflect the population centers of a century ago, Karen Petrou, co-founder and managing partner of Federal Financial Analytics, said. There are two reserve banks in Missouri and only one west of the Rocky Mountains. With so many of the reserve banks’ original duties able to be carried out digitally, Petrou said the best justification for keeping regional locations is to monitor the economy in different parts of the country. To that end, a reworking of the system would be best served by focusing on the locations and issues prevalent today, she said. “To the extent that the reserve banks do what they say they still have a mission to do — which is to reflect the national voice in economic policy — then they need to better represent the nation,” she said. “And that’s true not only in the diversity with the heads of banks … but also in the nature …

21 04, 2022

American Banker Magazine, April 2022

2022-04-25T19:43:24-04:00April 21st, 2022|Press Clips|

Book Review: The Lords of Easy Money

By Karen Petrou

In “The Lords of Easy Money,” the journalist Christopher Leonard takes a critical eye to the Federal Reserve’s actions following the 2008 financial crisis, in particular, how the policy of quantitative easing has worsened economic inequality in the U.S. (pg 39)

https://www.americanbanker.com/magazine/american-banker-magazine-april-2022

19 04, 2022

MarketWatch, Tuesday, April 19, 2022

2022-04-19T19:44:31-04:00April 19th, 2022|Press Clips|

Commodity prices are going haywire, prompting fears of the next financial crisis

By Chris Matthews

The prices of commodities including oil CL00, -5.00%, wheat W00, -2.04% and palladium PA00, -2.56% have surged this year as much of the global economy shakes off COVID restrictions and as Russia’s invasion of Ukraine has led to a key commodity-exporting region to be cut off from the the rest of the world. This volatility has not only helped fuel levels of inflation not seen in 40 years —market observers are warning that it could put the stability of the global economy at risk unless regulators and central banks wake up to the threats posed.“One after another development related to Ukraine is exposing the long standing flaws in the increasingly obsolete post-Second World War framework” of global trade and financial regulation, Karen Petrou, managing partner of the financial-policy think tank Federal Financial Analytics, told MarketWatch. Petrou argued that rapidly increasing commodity prices are putting stresses on both commodity traders and the banks and other actors that fund them, and failures to properly regulate these entities could force the Federal Reserve to bail them out, a move that threatens popular backlash….

https://www.marketwatch.com/story/commodity-prices-are-going-haywire-prompting-fears-of-the-next-financial-crisis-11650378691

14 04, 2022

CFA Society Minnesota, Thursday, April 14, 2022

2022-04-25T15:40:15-04:00April 14th, 2022|Press Clips|

Putting Investors First: Is the Fed Fueling Inequality? + Society Social

Karen Petrou, one of the foremost global experts in financial regulation, kicked off a heated debate last year when she published her book, Engine of Inequality: The Fed and the Future of Wealth in America. She then followed up with a July op-ed in The New York Times, “Only the Rich Could Love This Economic Recovery.” Baird Vice Chairman John Taft will moderate a discussion with Karen on why she believes “the U.S. central bank has played a direct, if wholly unintended, role in driving income and wealth inequality to astonishing heights.”

https://cfaminnesota.cfasocietyevents.org/event/60bde846-83b4-451b-b0c6-54ace0de53f3/summary

13 04, 2022

Marketplace, Thursday, April 13, 2022

2022-04-14T19:57:19-04:00April 13th, 2022|Press Clips|

What JPMorgan Chase’s earnings report can tell us about the state of the economy

By Matt Levin

We are in the thick of earnings season — that procession of corporations telling shareholders how they’ve been doing over the last three months. As usual, one of the first to report was JPMorgan Chase. ..“A credit reserve is the equivalent of a rainy day savings account, and the bank just put more money in their rainy day account,” said Karen Petrou, co-founder of Federal Financial Analytics. Some of the extra money is a hedge against trouble with European loans and some of it is a hedge against loan defaults here at home.

https://www.marketplace.org/2022/04/13/what-jpmorgan-chases-earnings-report-can-tell-us-about-the-state-of-the-economy/

13 04, 2022

Financial Times, Wednesday, April 13, 2022

2022-04-13T13:08:39-04:00April 13th, 2022|Press Clips|

Central bankers cannot afford to ignore the pain in commodities

By Karen Petrou

In the midst of chaos there is always volatility, and the commodities sector is very much feeling the pain. This has led to growing speculation that central banks will step in if unprecedented price swings show signs of systemic impact. I do not know any central banker who wants to bail out commodities, but if market stress turns systemic, they will act. Indeed, even if the stress seems manageable, they may intervene if they believe public welfare is at risk when core commodities go from pricey to prohibitive….

https://www.ft.com/content/f7945950-e02e-4064-b7f7-3846dd19675f

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12 04, 2022

The Harvard Club of Washington, Tuesday, April 12, 2022

2022-04-25T15:37:09-04:00April 12th, 2022|Press Clips|

Host Kevin Corke: In Engine of InequalityPetrou offers pragmatic solutions for creating more inclusive monetary policy and equality-enhancing financial regulation.   How the U.S. Federal Reserve inadvertently – but dramatically – exacerbated U.S. income and wealth inequality after 2010. Approaching the problem from a pragmatic, market-focused perspective, Karen demonstrates how the combined force of post-2008 monetary and regulatory policy made Americans more unequal, the financial system even more fragile, and voters angrier.

https://hcdc.clubs.harvard.edu/article.html?aid=2255

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