For copies of press clips listed below, please contact Federal Financial Analytics at info@fedfin.com. Please include the date and title of the requested item(s).

15 09, 2021

Mises Institute, Wednesday, September 15, 2021

2021-09-16T17:20:27+00:00September 15th, 2021|Press Clips, Uncategorized|

The Fed Is Bailing Out the Wealthy as Everyone Else Pays the Price
By Ryan McMaken

The Federal reserve says that inequality is a problem. At the same, the Fed also pretends to have nothing to do with it.
Last September, for instance, Jerome Powell bemoaned the “relative stagnation of income” for people with lower incomes in the United States, but then claimed the Fed “doesn’t have the tools” to address this issue. Instead, Powell, being the chairman of this ostensibly “independent” and “nonpolitical” central bank, called for the federal government to engage in fiscal policy efforts at income redistribution….In her new book, Engine of Inequality: The Fed and the Future of Wealth in America, Karen Petrou looks in detail at how Fed policy over the past decade—especially quantitative easing (QE) and ultralow interest rates—have benefited the wealthy while leaving most ordinary people behind. Petrou is one of the more interesting and informative analysts examining the financial services sector. As the head of Federal Financial Analytics Inc., she has provided research on the banking sector for more than thirty years, but in recent years she’s become more focused on exposing and examining the unhealthy and destructive effects of Fed policyPetrou takes a different approach from the Austrians. She appears to have arrived at her conclusions from observing the trends and outcomes produced by Fed policy and then working backward into a theoretical framework. The data seems to have prompted her to ask why things have gone …

15 09, 2021

The Hill, Wednesday, September 15, 2021

2021-09-16T14:14:52+00:00September 15th, 2021|Press Clips|

Crypto risk-takers aren’t crazy – they’re just desperate
By Karen Petrou

As we’ve learned the hard way, social media has become a viral force for pandemic-scale political conspiracies. Of course, it’s not the media themselves that do this; instead, it’s the rage many Americans harbor against governmental institutions profitably enabled by social-media colossi. It’s thus unsurprising that companies such as Facebook, which grew to omnipotence fueled by social anger, understand better than establishment financial institutions that economic anger is also growing at an ever more feverish pitch. As a result, what I’ll call viral finance is spreading through every corner of the once staid banking, payment and investing infrastructure. Crafting a new-age financial regulatory framework thus requires a keen understanding not only of how crypto assets work, but also why they work so seductively for the millions now putting their life savings at risk not because they don’t know better, but because they can’t do better any other way.

https://thehill.com/opinion/finance/572411-crypto-risk-takers-arent-crazy-theyre-just-desperate

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13 09, 2021

Wall Street Journal, Monday, September 13, 2021

2021-09-15T17:22:34+00:00September 13th, 2021|Press Clips|

Fed Stock Trading Emboldens Central Bank Critics, Report Says

News last week that leaders of the Dallas and Boston Federal Reserve banks were actively trading stocks and other investments while setting monetary policy continues to reverberate. “Once it might have been acceptable for Fed officials to own lots of stocks and bonds as long as none was issued by the banks that directly executed monetary policy and were also regulated by the central banks”. Karen Petrou of Federal Financial Analytics wrote in a report to clients. “Now of course none of this makes sense,” Ms. Petrou believes the situation as well as other factors, calls into question why quasi private regional…..

https://www.wsj.com/articles/fed-stock-trading-emboldens-central-bank-critics-report-says-11631563548?mod=searchresults_pos2&page=1

9 09, 2021

Barron’s, Thursday, September 9, 2021

2021-09-09T13:39:46+00:00September 9th, 2021|Press Clips|

The Fed Is Deep in Uncharted Waters. Danger Ahead
By Karen Petrou

Although Jay Powell delivered his all-important annual address atop a virtual Wyoming mountain, the Federal Reserve is nonetheless mired in the Big Muddy. This mythical river was described in a high-impact Pete Seeger song mobilizing Vietnam War opposition. In it, soldiers led by politicians start out in a small, clear stream, wade on and, as the waters rise and the mud deepens, keep going because they don’t and then can’t turn around. All they do is march on to a surely-grim fate. So too with U.S. monetary policy: It’s past time to turn around but still critical that the Fed quickly do so. Fed policy has three key components, none of which have worked as planned. The post-2010 recovery was the weakest since the Second World War; inflation constantly surprises the central bank; and markets keep rising to troubling and sometimes disastrous heights even as U.S. economic inequality gets steadily more acute.

https://www.barrons.com/articles/fed-economic-policy-powell-inflation-51631120497

26 08, 2021

Wall Street Journal, Thursday, August 26, 2021

2021-08-26T16:06:57+00:00August 26th, 2021|Press Clips|

Investors Who Put Their Pennies in Coinbase Could Get Pinched
By Justin Lahart
Coinbase COIN -2.44% Global’s stock valuation is predicated on a view that cryptocurrencies will only gain in popularity and acceptance in the years ahead. Regulators could have a thing or two to say about that in the coming months. …“I think that’s one of the arguments that are offered in favor of a digital currency, that particularly you wouldn’t need stable coins, you wouldn’t need cryptocurrency if you had a digital U.S. currency,” Mr. Powell said before Congress last month. “I think that’s one of the stronger arguments in its favor.” It all sets the stage for what could be a trying period for cryptocurrencies, and by extension, Coinbase. The infrastructure bill making its way through Congress includes a provision to toughen tax enforcement of crypto transactions. Regulators may also start making more noise. In addition to the Fed and SEC, Karen Petrou, who runs policy-analysis firm Federal Financial Analytics, believes that an array of regulatory agencies, including the Consumer Financial Protection Bureau, the Financial Stability Oversight Council and the Office of the Comptroller of the Currency could step into the fray.

https://www.wsj.com/articles/investors-who-put-their-pennies-in-coinbase-could-get-pinched-11629977580

26 08, 2021

American Banker, Bankshot Podcast, Wednesday, August 25, 2021

2021-08-26T15:10:31+00:00August 26th, 2021|Press Clips|

It’s getting harder to keep the Fed out of politics
By John Heltman

Every six weeks, Federal Reserve Chairman Jerome Powell steps to a podium and reads a statement from the Federal Open Market Committee. The statement explains where the panel has set its federal funds rate — the rate at which it pays interest on reserves held at the Fed, and effectively a systemwide floor for interest rates across the globe. Powell then explains how the FOMC is viewing current economic conditions and when or under which circumstances its stance on monetary policy might change. And then he takes questions from reporters….“Is there going to be a move to mandate the Fed set a certain amount of interest rates? No, not that I can see,” said Karen Petrou, managing partner at Federal Financial Analytics. “Is there going to be a move to bring the Fed under the appropriations process or alter the way even reserve bank presidents are appointed? Probably not. But that’s preserving only the form of institutional independence. “I think better questions are, ‘Is the Fed — on its own account, or under pressure — taking on or going to take on tasks that inevitably politicize it?’ Those, I think, are much more viable initiatives than direct politicization.”…  Read the article or listen to Podcast here.…

16 08, 2021

Bloomberg Op-ed, Monday, August 16, 2021

2021-08-17T13:26:57+00:00August 16th, 2021|Press Clips|

The Fed Has a Chance to Boost Equality With Digital Currency
By Karen Petrou
On Aug. 15, the U.S. marked the 50th anniversary of the birth of fiat currency, or a currency that depends on faith in the Federal Reserve and not in the gold standard. Like most 50th anniversaries, this one shows the celebrant worse for wear.
The “almighty dollar” is facing a raft of challenges from other supra-national currency powerhouses such as China and from giant technology companies that understand they would exercise even more market clout if they controlled not just what we buy and sell, but also how we pay for it. If the Fed doesn’t quickly redefine the dollar to reflect its rapid digitalization by other hands, central banks will join shopping malls on the long list of complacent category killers felled by agile competitors.

https://www.bloomberg.com/opinion/articles/2021-08-16/federal-reserve-can-boost-equality-with-digital-currency?sref=BSO3yKhf

10 08, 2021

American Banker, Tuesday, August 10, 2021

2021-08-11T13:19:12+00:00August 10th, 2021|Press Clips|

Circle could face an uphill climb to get a banking charter
By Brendan Pedersen
Circle’s announcement that it will seek commercial banking authority is the latest sign that nonbanks aren’t waiting around for regulators to tailor a charter just for them.
Fintech companies had hoped for years that the Office of the Comptroller of the Currency would deliver a special charter with some of the benefits of a bank but not all of the regulatory hurdles, such as needing Federal Deposit Insurance Corp. approval….“Certainly, there will be no special-purpose charters anytime soon,” said Karen Petrou, managing partner of Federal Financial Analytics. “The acting comptroller [Michael Hsu] has made that very clear.” Other analysts said it was possible that crypto companies interested in bank charters might be in for a rude awakening when they realize the full heft and impact that national bank oversight could have on their enterprise. “It’s my own view — and I suspect, over time, the OCC’s — that if an entity is able to meet the managerial capabilities, financial strength and capital requirements, and operational risk management requirements demanded of a bank with crypto activities,” said Petrou, “there’s no reason why they shouldn’t” be granted a bank charter. But Petrou added that she doubts “that any crypto trader fully understands the scope of the obligations it would entail to become a full-service national or state-chartered bank.” “I think there’s no doubt that the U.S would take the approach the Basel Committee has proposed …

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