Federal Reserve Chairman Ben Bernanke may be keeping quiet about his future plans, but he sure doesn’t sound like someone planning to seek Senate support for a third term at the helm of the U.S. central bank.
In unapologetic and sometimes testy exchanges before the Senate Banking Committee on Tuesday, the Fed chief defended his record and dismissed one Senate critic in unusually blunt terms.
WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke strongly defended the U.S. central bank’s bond-buying stimulus before Congress on Tuesday, saying its benefits clearly exceed possible costs.
The Fed chairman also urged lawmakers to avoid sharp spending cuts set to go into effect on Friday, which he warned could combine with earlier tax increases to create a “significant headwind” for the economic recovery.
WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke faces the first of two days of congressional testimony that will subject the Fed’s controversial bond-buying program to tough scrutiny and gauge his confidence in the resilience of the U.S. economy.
Coming just a week after the Fed’s meeting minutes sent U.S. stocks reeling by suggesting the central bank could pull back its economic stimulus earlier than had been expected, and a day after another sharp stock market drop, investors are certain to hang on every word.
WASHINGTON (Reuters) – A number of Federal Reserve officials think the central bank might have to slow or stop buying bonds before seeing the pickup in hiring the program is designed to deliver, according to minutes of the central bank’s policy meeting last month.
The Fed opted in January to keep buying bonds at an $85 billion monthly pace until the labor market outlook improved substantially, but the minutes on Wednesday showed anxiety over the strategy’s risks – news that sent stocks sharply lower.
WASHINGTON, Feb 20 (Reuters) – The U.S. Federal Reserve may
have to slow or stop buying bonds before seeing the pickup in
hiring the bold program is designed to deliver, a number of Fed
officials felt last month, according to minutes of the central
bank’s January policy meeting.
“A number of participants stated that an ongoing evaluation
of the efficacy, costs, and risks of asset purchases might well
lead the (policy-setting) committee to taper or end its
purchases before it judged that a substantial improvement in the
outlook for the labor market had occurred,” the minutes released
on Wednesday said.
Size matters, and Federal Reserve’s balance sheet is not as big as shrill critics of QE3 would lead you to believe.
True, $3 trillion is serious money. It represents a tripling in the size of the Fed’s balance sheet since 2008, before the U.S. central bank unleashed the first round of its aggressive campaign of so-called quantitative easing. It is now on round three, and has committed to keep buying bonds until it spies a substantial improvement in the outlook for the labor market.
STARKVILLE, Mississippi (Reuters) – The Federal Reserve has ramped up its monetary stimulus “considerably” this year compared with 2012, thanks to two significant changes, a senior Fed official said on Thursday.
James Bullard, president of the St. Louis Federal Reserve, said the switch to outright open-ended bond purchases, plus the adoption of thresholds to guide expectations on when the Fed would start to raise interest rates, were making policy more effective.
JONESBORO, Arkansas (Reuters) – The Federal Reserve is unlikely to be able to forge a consensus to adopt thresholds for guiding expectations on when it will end massive monthly bond purchases, a senior U.S. central banker said on Wednesday.
St. Louis Fed President James Bullard also said that it would make sense to taper off the buying, currently running at $85 billion a month, in order to avoid going “cold turkey” and confusing financial markets.
JONESBORO, Arkansas (Reuters) – Receding uncertainty about the global economy is bullish for U.S. growth this year but the country still faces risks from unresolved long-term fiscal challenges, a top Federal Reserve official said on Wednesday.
St. Louis Fed President James Bullard, a voting member of the U.S. central bank’s policy-setting committee in 2013, said implementation of the country’s new healthcare law could also create headwinds, though other restraints have been lifted.
(Reuters) – The Federal Reserve said on Thursday it was still working to determine the extent that its computer systems had been breached by hackers, adding that the incident was the subject of a criminal investigation by the Federal Bureau of Investigation.
“We are in the process of a comprehensive assessment to determine what information might have been obtained in this incident,” said Federal Reserve spokesman Jim Strader. “We remain confident that this incident did not affect critical operations of the Federal Reserve,” he said.