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Dec 20, 2013

Bernanke’s 11th hour pivot smoothes path for Yellen at Fed

SAN FRANCISCO/NEW YORK (Reuters) – By ensuring the Federal Reserve begins trimming its massive bond-buying stimulus before a more hawkish contingent of voters comes on board next year, Fed Chairman Ben Bernanke has greased the skids politically for his successor, Janet Yellen.

The U.S. central bank’s decision on Wednesday to begin to cut the pace of its monthly purchases by $10 billion, to $75 billion, gave the Fed’s bond-buying skeptics what they wanted: a roadmap out of a policy they felt risked fueling future inflation.

Dec 19, 2013

Fed cuts bond buying in first step away from historic stimulus

WASHINGTON (Reuters) – The Federal Reserve on Wednesday embarked on the risky task of winding down the era of easy money, saying the U.S. economy was finally strong enough for it to start scaling down its massive bond-buying stimulus.

The central bank modestly trimmed the pace of its monthly asset purchases, by $10 billion to $75 billion, and sought to temper the long-awaited move by suggesting its key interest rate would stay at rock bottom even longer than previously promised.

Dec 18, 2013

Fed cuts bond-buying but stresses easy policy

WASHINGTON, Dec 18 (Reuters) – The U.S. Federal Reserve
announced plans to trim its aggressive bond-buying program on
Wednesday but sought to temper the long-awaited move by
suggesting its key interest rate would stay lower for even
longer than previously promised.

In what amounts to the beginning of the end of its
unprecedented support for the U.S. economy, the central bank
said it would reduce its monthly asset purchases by $10 billion,
bringing them down to $75 billion. It trimmed equally from
mortgage and Treasury bonds.

Dec 18, 2013

Fed faces tough call on bond buying as economy strengthens

WASHINGTON, Dec 18 (Reuters) – The Federal Reserve will
decide on Wednesday whether the U.S. economy is finally
resilient enough to withstand less policy support, or whether it
is prudent to wait a bit longer.

With the world’s financial markets on edge, the U.S. central
bank wraps up a two-day meeting with a highly anticipated policy
announcement at 2 p.m. (1900 GMT), followed by Ben Bernanke’s
last news conference as Fed chairman a half hour later.

Dec 16, 2013

Bernanke says Fed legitimacy depends on public communication

By Jonathan Spicer

(Reuters) – The Federal Reserve must clearly explain its decisions to Americans and convince them that the policies are in their interest, Chairman Ben Bernanke said on Monday without specifically discussing monetary policy or the U.S. economy.

Bernanke, in prepared remarks to an event celebrating the Fed’s centennial, said the U.S. central bank’s legitimacy and independence relies on two-way communication with the public.

Dec 15, 2013

Fed could set off year-end fireworks

NEW YORK (Reuters) – The possibility that the Federal Reserve could finally start to trim its extraordinary stimulus for the economy could make this week an explosive one for financial markets.

Though the odds still point to no major policy change when U.S. central bankers meet December 17-18, most of the recent domestic economic data suggest the beginning of the end of their massive bond-buying program is coming sooner than later.

Dec 11, 2013

Israel’s Fischer picked to be next Fed vice chair: source

By Steven Scheer and Jonathan Spicer

(Reuters) – Stanley Fischer, who led the Bank of Israel for eight years until he stepped down in June, has been asked to be the Federal Reserve’s next vice chair once Janet Yellen takes over as chief of the U.S. central bank, a source familiar with the issue said on Wednesday.

Fischer, 70, is widely respected as one of the world’s top monetary economists. He is seen as a pragmatic policymaker and has praised the Fed’s extraordinary steps to boost the U.S. economy. At the Massachusetts Institute of Technology, he once taught current Fed Chairman Ben Bernanke and Mario Draghi, the European Central Bank president.

Dec 11, 2013

For Fed, delivering a message on policy path is new focus

NEW YORK/SAN FRANCISCO (Reuters) – Now that the central question before the Federal Reserve has shifted from whether to cut its extraordinary stimulus to when exactly to pull back, the debate at next week’s meeting will center on how best to communicate that plan.

While recent and brisk improvements in the labor market have raised the chance that policymakers might taper at their meeting next week, most economists expect the Fed to keep its $85 billion-a-month bond-buying program in place for a bit longer.

Dec 11, 2013

Preview – For Fed, delivering a message on policy path is new focus

NEW YORK/SAN FRANCISCO (Reuters) – Now that the central question before the Federal Reserve has shifted from whether to cut its extraordinary stimulus to when exactly to pull back, the debate at next week’s meeting will center on how best to communicate that plan.

While recent and brisk improvements in the labor market have raised the chance that policymakers might taper at the upcoming policy meeting, on December 17-18, most expect the Fed to keep its $85 billion-a-month bond-buying program in place.

Dec 9, 2013

Carney sees hopeful signs in UK economy

NEW YORK (Reuters) – Britain’s economic recovery is showing signs that it can reach self-sustaining momentum, but monetary policy will need to remain exceptionally loose for some time to come, Bank of England Governor Mark Carney said on Monday.

Responding to some arguments that rich economies might be stuck in a rut of low growth, Carney said in a speech that he was confident that monetary policy was gaining traction and that a ‘liquidity trap’ had been avoided.