Rise in U.S. household debt hints at end of deleveraging
WASHINGTON, March 7 (Reuters) – U.S. household debt grew at
its fastest pace since early 2008 in the fourth quarter of last
year, a possible sign that the painful process of paring back
borrowing in the aftermath of the financial crisis may have run
its course.
Household debt rose at a 2.5 percent annual rate in the
fourth quarter, the Federal Reserve said on Thursday in its
quarterly Flow of Funds report. It was the steepest gain since
the first quarter of 2008 and only the third quarter since then
in which debt levels rose.
Fed says economy continued to post modest growth in Jan-Feb
WASHINGTON (Reuters) – Economic growth continued to improve gradually in January and early February as consumer spending picked up and the country’s battered housing market maintained a broad-based recovery, the Federal Reserve said on Wednesday.
In a cautiously optimistic report from its 12 regional branches, the U.S. central bank also drew attention to stronger demand in the auto sector and for technology and logistics services, while emphasizing that price pressures remained muted.
Fed foes take aim over zero rates in congressional show trial
WASHINGTON, March 5 (Reuters) – It wasn’t a fair fight. A
Republican-controlled committee of the U.S. House of
Representatives pitted three outspoken critics of the Federal
Reserve against a lonesome dove, who tried his best to defend
the central bank against charges it was ruining the country.
Entitled “Near-zero rates, near zero effect? Is
unconventional monetary policy really working?”, the hearing on
Tuesday before the subcommittee on monetary policy sought to
explore the risks of ultra-bold Fed actions to spur U.S. growth.
Bernanke says Fed stimulus benefits clear, downplays risks
WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke strongly defended the U.S. central bank’s monetary stimulus before Congress on Tuesday, easing financial market worries over a possible early retreat from bond purchases.
Bernanke said Fed policymakers are cognizant of potential risks from their extraordinary support for the economy, including the possibility that it might fuel unwanted inflation or stoke asset bubbles.
Bernanke’s Senate tone not that of Fed Chairman seeking third term
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.
Bernanke says Fed stimulus benefits clear, budget cuts a risk
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.
Bernanke to face Fed critics in testimony to Congress
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.
Fed minutes send warning on durability of bond buying
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.
Fed may need to halt QE3 before jobs market heals-minutes
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.
Show and tell: Fed’s balance sheet not as big as you thought
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.
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