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Jul 10, 2013
via MacroScope

Two Fed financial stress measures show conditions still easy

Composure restored. Despite gut-clenching stock market swoops and a violent 100 basis point upward spike in 10-year bond yields since the Fed’s June 19 meeting and press conference with Chairman Ben Bernanke, financial conditions are still very easy.

That ought reassure officials at the U.S. Federal Reserve that some normalcy has been restored in financial markets after the abrupt reaction to their decision to signal they would scale back bond purchases later this year.

Jul 3, 2013

Fed’s word is its bond, now lost in translation

WASHINGTON/NEW YORK (Reuters) – It probably seemed like a good idea to Federal Reserve officials at the time.

But their decision to stick Fed Chairman Ben Bernanke out on live television two weeks ago to explain how the Fed aims to scale back and eventually end its massive economic stimulus program, without having the message in a well-parsed policy statement he could hide behind, backfired badly.

Jun 28, 2013

Fed’s Stein puts focus on September as time to assess QE3

, June 28 (Reuters) -
S eptember could be an opportune time for the Federal Reserve
to consider scaling back its assets purchase, an influential
official of the U.S. central bank said on Friday, though he said
the Fed must take a long view of economic progress and not be
blinded by the most recent data.

The remarks by Fed Governor Jeremy Stein drew the attention
of economists and investors after he ticked off several examples
of improvement in the labor market since the Fed launched its
bond-buying program last September.

Jun 28, 2013

Fed’s Lacker says market volatility should not sap U.S. growth

, June 28 (Reuters) – Financial
markets should brace for more volatility as they digest news the
Federal Reserve will scale back bond buying later this year, a
senior central banker said on Friday, but this is an
understandable adjustment and will not derail growth.

“This type of volatility is a normal part of the process of
incorporating new information into financial asset prices and
should not interfere with the moderate-growth scenario that I
have presented,” said Richmond Fed President Jeffrey Lacker.

Jun 27, 2013

Closing ranks, Fed officials push back on ‘out of sync’ markets

NEW YORK/WASHINGTON (Reuters) – In remarkably similar tones, two influential Federal Reserve policymakers on Thursday sought to dissuade investors that monetary accommodation was fading any time soon, each going so far as to say markets have misinterpreted the U.S. central bank’s intentions.

The separate speeches from New York Fed President William Dudley and Fed Governor Jerome Powell underscore how uneasily U.S. policymakers have been watching the sharp retrenchment in global markets since last week, when the central bank unveiled a timeline for the reduction and eventual end to asset purchases.

Jun 27, 2013

Fed’s Powell urges markets to dial back rate hike expectations

WASHINGTON (Reuters) – Financial markets have over-reacted to the Federal Reserve’s statements on reducing the pace of bond purchases later this year, and have brought expectations of the first Fed rate hike too far forward, a senior U.S. central banker said on Thursday.

“Market adjustments since May have been larger than would be justified by any reasonable reassessment of the path of policy,” Fed Board Governor Jerome Powell said in a speech at the Bipartisan Policy Center, a Washington think-tank.

Jun 21, 2013

Bernanke bond announcement was poorly timed: Fed’s Bullard

WASHINGTON (Reuters) – St. Louis Federal Reserve Bank President James Bullard on Friday issued a sharp rebuke of his colleagues’ decision this week to announce a plan to reduce the central bank’s bond buying, calling the move premature and worrying the Fed is risking its credibility as a force for price stability.

Neither the central bank’s own economic growth forecasts nor its expectations for continued weak inflation supported a decision to dial back soon on the $85 billion a month it has been pumping into the financial system, the St. Louis Fed said in explaining Bullard’s thinking.

Jun 21, 2013

Bernanke bond announcement ‘inappropriately timed:’ Fed’s Bullard

WASHINGTON (Reuters) – St. Louis Federal Reserve Bank President James Bullard on Friday issued a sharp rebuke of his colleagues’ decision this week to announce a plan to reduce the central bank’s bond buying, calling the move premature and worrying the Fed is risking its credibility as a force for price stability.

Neither the central bank’s own economic growth forecasts nor its expectations for continued weak inflation supported a decision to dial back soon on the $85 billion a month it has been pumping into the financial system, the St. Louis Fed said in explaining Bullard’s thinking.

Jun 20, 2013

Bernanke says Fed likely to reduce bond buying this year

WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke said on Wednesday the U.S. economy is expanding strongly enough for the central bank to begin slowing the pace of its bond-buying stimulus later this year.

Bernanke’s confirmation that the Fed is getting closer to pulling back on its $85 billion in monthly asset purchases confirmed investor fears, sending stocks and bonds sharply lower and pushing benchmark Treasury yields to a 15-month high.

Jun 19, 2013

Bernanke points to reduced Fed bond buying this year

WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke said on Wednesday the U.S. central bank expects to slow the pace of its bond purchases later this year and bring them to a halt around mid-2014, comments that weighed on stocks and pushed bond yields to a 15-month high.

The Fed expects moderate growth to lead to continuing healing in the job market as headwinds facing the economy ease, Bernanke said. He also said policymakers expect inflation to move back up toward their long-term 2 percent goal.

    • About Alister

      "White House Correspondent. Based in the United States for six years covering the economy and Federal Reserve before moving to the White House beat. Previously reported for Reuters from Germany, South Africa, the Netherlands, the United Kingdom and Iraq."
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