SAN DIEGO (Reuters) – The United States economy likely suffered a lasting decline in its trend potential growth rate as a result of the severe 2007-2009 U.S. recession, a top official of the Federal Reserve said on Friday.

“Any of you who have looked at the data of the most recent … recession, it certainly looks like we’ve had a permanent shock,” Charles Plosser, president of the Philadelphia Federal Reserve Bank, told a panel at the annual meeting of the American Economic Association. “The problem is we won’t know the answer to that for many years to come.”

WASHINGTON/CHICAGO (Reuters) – Two top Federal Reserve officials on Friday warned that the U.S. central bank’s latest policy actions risk straying into fiscal territory, and raised questions about the decision to tie monetary policy to specific economic guideposts.

“I do not believe that tying the federal funds rate to a specific numerical threshold for unemployment is an appropriate and balanced approach to the FOMC’s price stability and maximum employment mandates,” Richmond Federal Reserve President Jeffrey Lacker said in a statement, referring to the Fed’s policy-setting Federal Open Market Committee.

WASHINGTON (Reuters) – Top central banks around the world on Thursday renewed a series of currency swap lines set up during the 2007-2009 financial crisis, providing a precaution against future market strains.

The U.S. Federal Reserve said it had extended for another year the dollar swaps with the European Central Bank, Bank of Canada, Bank of England and Swiss National Bank. The announcement was released at the same time by the other central banks.

WASHINGTON (Reuters) – The U.S. Federal Reserve, announcing a new round of monetary stimulus, took the unprecedented step on Wednesday of indicating interest rates would remain near zero until unemployment falls to at least 6.5 percent.

It was the latest in a series of unorthodox measures taken by central banks around the world to battle erratic, sub-par recoveries from the financial crisis and recession of 2007-2009.

WASHINGTON (Reuters) – The Federal Reserve, announcing a new round of monetary stimulus, took the unprecedented step on Wednesday of indicating interest rates would remain near zero until unemployment falls to at least 6.5 percent.

It was the latest in a series of unorthodox measures taken by central banks around the world to battle erratic, sub-par recoveries from the financial crisis and recession of 2007-2009.

WASHINGTON (Reuters) – There are limits to how much aid the Federal Reserve can provide to the economy, Fed Chairman Ben Bernanke warned on Wednesday as he urged politicians to tackle a year-end fiscal cliff that could derail the country’s gradual recovery.

“We have innovated quite a bit in the last few years, and (it) is always possible we could find new ways to provide support for the economy,” he told a news conference after the Fed announced another round of bond buying to spur growth.

WASHINGTON, Dec 12 (Reuters) – There are limits to how much
aid the Federal Reserve can provide to the U.S. economy, Fed
Chairman Ben Bernanke warned on Wednesday as he urged
politicians to tackle a year-end fiscal cliff that could derail
the country’s gradual recovery.

“We have innovated quite a bit in the last few years, and
(it) is always possible we could find new ways to provide
support for the economy,” he told a news conference after the
Fed announced another round of bond buying to spur growth.

WASHINGTON (Reuters) – The Federal Reserve ramped up its stimulus to the economy on Wednesday, expressing disappointment with the pace of recovery in employment as contentious U.S. budget talks heighten uncertainty about the outlook.

The central bank replaced a more modest stimulus program due to expire at year-end with a fresh round of Treasury purchases that will increase its balance sheet. It committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September.

By Alister Bull and Ann Saphir

(Reuters) – The Federal Reserve was reminded on Friday of the challenge of adopting numerical thresholds to guide expectations for future interest rate hikes, after the November jobless rate fell due to an unwelcome decline in the country’s labor participation rate.

The U.S. central bank, which meets next week to review policy, is debating the merits of replacing a current pledge to hold interest rates near zero until at least mid-2015, with thresholds for unemployment and inflation.

WASHINGTON (Reuters) – The Federal Reserve is set to announce a fresh round of Treasury bond purchases when it meets next week, avoiding monetary policy tightening to maintain support for the weak U.S. economy amid uncertainty over the looming year-end “fiscal cliff.”

Many economists think the U.S. central bank will announce monthly bond purchases of $45 billion after its policy gathering on December 11-12, signaling it will continue to pump money into the U.S. economy during 2013 in a bid to bring down unemployment.