Jonathan's Feed
Oct 14, 2014

Exclusive: More QE might be appropriate if U.S. economy faltered- Fed’s Williams

WASHINGTON (Reuters) – The head of the San Francisco Federal Reserve Bank on Tuesday said he would be open to another of round asset purchases if inflation trends were to fall significantly short of the U.S. central bank’s target.

Although he said it would take a big shift in the U.S. economic outlook for the Fed to restart its bond buying, John Williams said the possibility of a new downturn in Europe and other global economic woes pose a risk to the United States.

Oct 9, 2014

BoJ has many policy easing options if needed: Kuroda

NEW YORK (Reuters) – The Bank of Japan has many tools available if it were to ease monetary policy further, Governor Haruhiko Kuroda said, adding that the Japanese government bond (JGB) market is a “huge” one among various financial assets the central bank can tap.

“There are many options available, and if necessary we will not hesitate to make any necessary and appropriate” moves to achieve the BOJ’s 2 percent inflation target, Kuroda told the Economic Club of New York on Wednesday.

Oct 8, 2014

Fed minutes show debate on changing rate guidance heating up

WASHINGTON/NEW YORK (Reuters) – The Federal Reserve’s debate on its interest rate guidance heated up last month, with several officials showing concern about misleading investors and pushing for a more data-dependent approach, according to minutes from its last policy meeting.

But as the Fed grapples with how to communicate its view on hiking rates, the minutes also show concern about the rising dollar, slowing inflation, and economic turmoil in Europe and Asia, factors that support the U.S. central bank’s current of keeping policy accommodation in place for the near future.

Oct 7, 2014

Fed’s Dudley sees mid-2015 rate rise, continued U.S. rebound

By Jonathan Spicer

TROY N.Y. (Reuters) – The Federal Reserve could reasonably be expected to raise U.S. interest rates in mid-2015, an influential Fed policymaker said on Tuesday in a speech that cautiously predicted a rebound in U.S. economic growth and inflation.

William Dudley, president of the New York Fed, pointed to the stronger U.S. dollar as a key reason why growth and inflation are unlikely to substantially overshoot his forecasts.

Oct 2, 2014

Boss defends New York Fed bank examiners in wake of ‘secret’ tapes

NEW YORK (Reuters) – The head of the Federal Reserve Bank of New York defended his on-the-ground bank examiners after secretly recorded tapes suggested they were too cozy with Wall Street, saying on Thursday he “completely” stands behind them.

William Dudley, president of the New York Fed, said the independence of his bank examiners is “paramount,” and that he has personally overseen improvements in the group that is tasked with policing some of the world’s biggest banks.

Oct 2, 2014

Boss defends NY Fed bank examiners in wake of ‘secret’ tapes

NEW YORK, Oct 2 (Reuters) – The head of the Federal Reserve
Bank of New York defended his on-the-ground bank examiners after
secretly recorded tapes suggested they were too cozy with Wall
Street, saying on Thursday he “completely” stands behind them.

William Dudley, president of the New York Fed, said the
independence of his bank examiners is “paramount,” and that he
has personally overseen improvements in the group that is tasked
with policing some of the world’s biggest banks.

Sep 26, 2014

Secret tapes of Fed meetings on Goldman prompt call for U.S. hearings

NEW YORK/WASHINGTON (Reuters) – An influential U.S. senator wants to hold hearings into “disturbing” issues raised by secretly taped conversations between Federal Reserve supervisors and officials at Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz), a bank the Fed was tasked with policing.

Elizabeth Warren, a Democrat on the Senate Banking Committee, on Friday called for hearings after portions of the recordings from 2011 and 2012 were made public. Fellow Democrat Sherrod Brown, also a committee member, called for a “full and thorough investigation” into the allegations they raised.

Sep 18, 2014

Wall Street sees holes in Fed’s new policy-tightening plan

NEW YORK, Sept 18 (Reuters) – No sooner did the Federal
Reserve reveal its plan for eventually tightening U.S. monetary
policy than many on Wall Street flagged problems with the
mechanics of the strategy, and said more adjustments would have
to come.

Some market participants worried that a new limit on the
Fed’s reverse repurchase facility would hurt efforts to raise
interest rates as quarters draw to an end when investors
typically hunt for collateral. Others predicted the
controversial tool would ultimately play a bigger role than the
U.S. central bank let on.

Sep 16, 2014

Roller-coaster debate over new Fed tool may get resolved this week

NEW YORK/SAN FRANCISCO (Reuters) – There is a distinct chance U.S. Federal Reserve officials will rewrite their strategy for normalizing monetary policy this week given signs that a roller-coaster debate over a new tool for controlling interest rates is nearing its resolution.

Investors worldwide are watching the U.S. central bank’s policy meeting that ends on Wednesday for hints on when it will start raising borrowing costs. But perhaps as importantly, officials may finally update a 2011 blueprint for a gradual tightening of the Fed’s ultra-loose policy and shrinking its swollen asset portfolio.

Aug 26, 2014
via MacroScope

Fed’s embrace of labor market is complete at Jackson Hole, 20 years later

Photo

By Michael Flaherty, Howard Schneider and Jonathan Spicer in Jackson Hole, Wyo.

To dig deeper into the significance of Federal Reserve Chair Janet Yellen’s message at the annual central banking summit in Jackson Hole this past weekend, go back twenty years to the same event, when a top Fed official sparked a firestorm by showing support for the labor market. At the end of the 1994 symposium, the new Fed vice chairman at the time, Alan Blinder, gave a 14 page overview in which he stressed the point that central banks have a role in reducing unemployment.

The comments prompted speculation that he was opposing the views of his free-market boss, Alan Greenspan, and a media frenzy ensued — a frenzy that people present at the time say Blinder never recovered from. The contrast between what happened at Jackson Hole two decades ago, and what happened there last week shows how far the Fed has swung in its embrace of the labor markets, and how far it is ready to go.