While markets are debating whether the Fed will raise interest rates in September, a more challenging question is how will they implement that policy change. There is a new blog by Stephen Cecchetti and Kim Schoenholtz that cuts through the clutter and clearly lays out how the Federal Reserve will operate monetary policy once it lifts off from the zero lower bound. As they note, their paper draws on a valuable primer by Federal Reserve economists Ihrig, Meade, and Weinbach that was recently released on the topic. (For disclosure purposes, I am married to one of the authors of the Fed paper.) Both are well worth reading.
Greek banks reopened today, but there isn’t much you can do at them. Capital controls and withdrawal limits remain in effect, money transfers are barred (except for tax, social security or a few other allowed domestic transactions) and new accounts or loans effectively ruled out. Greeks now will be able to deposit checks, access safety deposit boxes, and withdraw money without an ATM card. All good things, though I suspect that any political boost from the visuals relating to reopening will proved short-lived.