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Feb 13, 2014

New York Fed threatens new rules to stop repo-market fire sales

NEW YORK (Reuters) – The banks and big funds in a key short-term funding market have not even begun to address the risk of destabilizing “fire sales,” and the lack of action may force regulators to step in with new rules, the Federal Reserve Bank of New York warned on Thursday.

The market for so-called tri-party repurchases, or repos, is at particular risk of seizing up entirely, as it did in the 2008 financial crisis, if a big player defaults, the New York Fed said. It added investors are “highly vulnerable” to liquidity pressures and credit losses that could force them to dump collateral in a fire sale.

Feb 12, 2014

Jobless drop will force Fed to more ‘traditional’ policy -Bullard

NEW YORK, Feb 12 (Reuters) – The Federal Reserve will
probably have to return to more “traditional” policy-making now
that the U.S. jobless rate has fallen to 6.6 percent, so close
to the U.S. central bank’s existing 6.5-percent threshold for
considering an interest-rate rise, a top Fed official said on
Wednesday.

St. Louis Fed President James Bullard, speaking on a panel
at the New York Stock Exchange, said the Fed will have to adjust
its so-called forward guidance on monetary policy. He expects
the Fed to drop its economic thresholds and have to “make more
qualitative judgments” on when to tighten policy.

Feb 12, 2014

Yellen stays the course, says Fed to keep trimming stimulus

WASHINGTON (Reuters) – Janet Yellen, fresh from taking the helm of the Federal Reserve, made it clear on Tuesday she would not make any abrupt changes to U.S. monetary policy, saying the central bank was on track to keep reducing its stimulus even though the labor market recovery was far from complete.

In her first public comments since becoming Fed chief earlier this month, Yellen had testy exchanges with some Republican lawmakers over Wall Street regulation and central bank independence. But she managed to keep financial markets calm by emphasizing continuity with the policy approach taken by her predecessor, Ben Bernanke.

Feb 11, 2014

Yellen says Fed on track to keep trimming stimulus

WASHINGTON, Feb 11 (Reuters) – Federal Reserve Chair Janet
Yellen said on Tuesday the U.S. central bank was on track to
keep reducing its policy stimulus, even as she acknowledged the
labor market recovery was “far from complete.”

In her first public comments as Fed chief, Yellen said the
central bank would need to keep its eye on a broad range of
labor market indicators, not just the unemployment rate, as it
continued to assess the health of the jobs market.

Feb 11, 2014

In cautious testimony, Fed’s Yellen says labor recovery far from complete

WASHINGTON, Feb 11 (Reuters) – New Federal Reserve Chair
Janet Yellen said on Tuesday the labor market recovery is “far
from complete” despite a drop in unemployment, yet she said the
U.S. central bank expects to continue trimming policy stimulus
in measured steps due to broader improvements in the economy.

In her first public comments as Fed chief, Yellen, giving a
balanced testimony to a House committee, nodded to the recent
volatility in global financial markets, but said at this stage
it does “not pose a substantial risk to the U.S. economic
outlook.”

Feb 11, 2014

Yellen, new Fed chair, takes hot seat at Capitol

WASHINGTON (Reuters) – The health of the U.S. economy and the extraordinary and controversial measures the Federal Reserve has taken to support it will top the agenda on Tuesday when Janet Yellen testifies to lawmakers for the first time as head of the Federal Reserve.

Yellen, in just her second week on the job since succeeding Ben Bernanke earlier this month, will want to reinforce the central bank’s determination to halt the money-printing presses later this year while ensuring investors that a rise in interest rates remains a long way off, economists say.

Feb 9, 2014

As Yellen makes Fed debut, expect theater, not fireworks

By Jonathan Spicer

(Reuters) – Janet Yellen’s first test as chair of the Federal Reserve comes on Tuesday when she faces U.S. lawmakers, some hostile to the central bank, who will want to know how committed she is to winding down the Fed’s support for the economy.

With the world’s financial markets watching, Yellen, who succeeded Ben Bernanke last week, will have a chance to set a mostly upbeat tone and point to signs of steady economic progress, despite some recent bumps in the road.

Feb 7, 2014

U.S. jobless rate forces Yellen’s hand on Fed guidance

SAN FRANCISCO/NEW YORK (Reuters) – The rapid drop in U.S. unemployment will make re-crafting the Federal Reserve’s easy-money promise a top priority for new Chair Janet Yellen, who will probably avoid tying policy to specific targets in the labor market.

It was more than a year ago that the U.S. central bank first promised not to raise interest rates until joblessness fell to at least 6.5 percent, a pledge that policymakers thought would hold until at least mid-2015.

Feb 5, 2014

A hawk pushes against majority at Fed on trimming stimulus

/NEW YORK, Feb 5 (Reuters) – Going a step
further than his colleagues at the Federal Reserve, a hawkish
policymaker said on Wednesday the U.S. central bank should wind
down its bond purchases faster than planned and end it before
mid-year.

Philadelphia Fed President Charles Plosser’s criticism of
the policy stimulus is unlikely to sway new Chair Janet Yellen
and the majority of Fed policymakers, whose position was
reinforced on Wednesday by Dennis Lockhart of the Atlanta Fed.

Feb 4, 2014

Bernanke starts new job at Brookings after weekend off

NEW YORK (Reuters) – Former Federal Reserve Chairman Ben Bernanke began his new job at the Brookings Institution on Monday, wasting no time getting back to work just three days after ending his tenure as head of the world’s most powerful central bank.

Bernanke, who led the U.S. central bank in its aggressive efforts to right the economy after the financial crisis and pull it out of the Great Recession, joined the centrist policy think tank in Washington as a distinguished fellow in residence, Brookings said.