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Oct 29, 2014

Yellen reins in Fed hawks with a few choice words

SAN FRANCISCO/NEW YORK, Oct 29 (Reuters) – Federal Reserve
Chair Janet Yellen persuaded two hawkish colleagues to join her
pledge on Wednesday to keep interest rates low for a long while,
winning them over by sounding an optimistic tone on the U.S. job
market and inflation.

Charles Plosser and Richard Fisher, chiefs of the regional
Philadelphia and Dallas Fed banks, respectively, had dissented
at the U.S. central bank’s last meeting in September and had
argued for ditching a promise not to raise rates for a
“considerable time” after ending a bond-buying stimulus program.

Oct 29, 2014

U.S. Senate hearing planned on tapes of Fed-Goldman meetings

NEW YORK, Oct 29 (Reuters) – An influential U.S. senator
aims to hold a public hearing after secretly recorded
conversations between regulators at the Federal Reserve Bank of
New York and officials at Goldman Sachs raised questions about a
too-cozy relationship.

Sherrod Brown, a Democrat on the Senate Banking Committee,
has not yet confirmed a date. But “Brown is working to hold a
hearing,” a spokeswoman said on Wednesday, confirming an earlier
report by Bloomberg.

Oct 27, 2014

Worried on low inflation, Fed seen offering soothing words

NEW YORK (Reuters) – The U.S. Federal Reserve this week will likely reinforce its stated willingness to wait a long while before hiking interest rates after a volatile month in financial markets that saw some measures of inflation expectations drop worryingly low.

The reassurance will be all the more necessary given that the U.S. central bank is all but certain to announce the end of its massive bond-buying stimulus when it wraps up a two-day meeting on Wednesday.

Oct 21, 2014

Fed spotted JPMorgan ‘Whale’ risks years before scandal -inspector

NEW YORK/WASHINGTON, Oct 21 (Reuters) – The Federal
Reserve’s New York branch knew about risks JPMorgan Chase & Co
was taking with its massive “London Whale” derivatives bets four
years before they imploded, but it failed to act properly to
head them off, the U.S. central bank’s inspector general said.

The Fed’s Office of Inspector General said on Tuesday one of
the key flaws it uncovered in its probe of the 2008 transaction
at the Wall Street bank was the New York Fed’s over-reliance on
certain personnel who left the supervisory team in 2011. That
created a “significant loss of institutional knowledge” within
the team assigned to inspect JPMorgan, the report said.

Oct 20, 2014

Market action reinforces need for policy patience: Fed’s Rosengren

BOSTON (Reuters) – The recent volatility in financial markets reinforces the need for the Federal Reserve to be patient with its policy stimulus and to clearly tie an eventual interest-rate rise to improving economic conditions, a top Fed policymaker told Reuters.

Boston Fed President Eric Rosengren said that while it would take a few more weeks to understand the real economic fallout from the market selloff, he could “easily imagine” a scenario in which the U.S. central bank keeps rates near zero until 2016.

Oct 17, 2014

Citing U.S. values, Yellen says troubled by rise in economic inequality

BOSTON (Reuters) – Federal Reserve Chair Janet Yellen on Friday said the growth of economic inequality in the United States was not in keeping with American values and she hinted at a range of steps that could address it.

With global stock markets rebounding after frenzied selling, Yellen did not comment on the volatility or on monetary policy. Instead, she ventured into a social critique rare for a U.S. central banker, focusing on the widening gulf between rich and poor.

Oct 17, 2014

Citing U.S. values, Yellen says greatly concerned by rise in economic inequality

BOSTON (Reuters) – Federal Reserve Chair Janet Yellen said on Friday the growth of economic inequality in the United States “greatly” concerned her, and suggested in a detailed speech on the politically charged issue that Americans should ask whether it was compatible with their values.

With global financial markets rebounding from days of frenzied selling, Yellen did not comment on the volatility or on monetary policy. Instead she focused on the gulf between rich and poor that has only grown wider over the last several decades and, she said, through the U.S. economic recovery.

Oct 16, 2014

Fed likely to end bond buying, may signal caution on rate hikes

By Jonathan Spicer, Michael Flaherty and Ann Saphir

(Reuters) – The Federal Reserve is likely to reassure investors later this month that it won’t stand idle if global turbulence threatens the U.S. economy, but a proposal from one top policymaker to keep on buying bonds looks to be a bridge too far.

James Bullard, who heads the St. Louis Fed, suggested on Thursday that sticking with bond purchases for a few more months would give policymakers the time needed to assess a recent deterioration in the inflation outlook.

Oct 16, 2014

Fed official wants to keep up QE as inflation expectations slip

Oct 16 (Reuters) – The Federal Reserve should keep buying
bonds for longer than planned in the face of volatile markets
and falling inflation expectations, a top U.S. central banker
said on Thursday, even as another Fed policymaker warned against
an over-reaction.

James Bullard, president of the St. Louis Fed, is the only
official at the central bank to publicly suggest putting on hold
the Fed’s widely telegraphed plan to halt its asset-purchase
program later this month. Yields on U.S. bonds, which have
plunged the last few days, rebounded after his comments.

Oct 16, 2014

Fed still on course for rate rise around mid-2015 say economists: Reuters poll

By Jonathan Spicer and Rahul Karunakar

(Reuters) – The Federal Reserve is still set to raise interest rates by mid-2015, according to a Reuters poll of economists that also found a better-than-even chance bond markets are underestimating how quickly policy will eventually tighten.

The latest poll, conducted Oct 8-15 in the midst of widespread selling on global stock markets, stands in contrast to U.S. interest rate futures markets which in recent days have pushed off the timing of the first hike to late next year.