NEW YORK (Reuters) – The U.S. Federal Reserve, intent on cutting its stimulus again this week, is not about to blink in the face of a brutal selloff of emerging market assets that could yet gain steam in Turkey, Argentina and elsewhere.
Though the central bank’s 16-month-old bond-buying program is meant to boost the U.S. economy, in the past it has lifted currencies and stocks in emerging markets that have benefited from a rush of international investment and the resulting lower interest rates.
SAN FRANCISCO/NEW YORK (Reuters) – Federal Reserve policymakers will likely leave intact their delicately worded easy-money message when they meet next week, despite a surprisingly sharp drop in U.S. unemployment that threatens to make a central part of that message irrelevant.
Top Fed officials believe their landmark decision last month to reduce the pace of the U.S. central bank’s bond-buying stimulus was well received by financial markets. That, in turn, allows them to make another $10 billion cut to the bank’s monthly bond purchases at the January 28-29 meeting without needing to adjust their promise to keep interest rates low in the future.
WASHINGTON (Reuters) – The U.S. Federal Reserve should give the economy the stimulus it needs despite “credible” worries that its massive bond-buying program could destabilize the financial system, Fed Chairman Ben Bernanke said on Thursday.
In his last planned public remarks as head of the central bank, Bernanke said concern about the potential harm to financial stability is the only risk from unconventional monetary policies “that I find personally credible.”
DALLAS/PHILADELPHIA (Reuters) – The Federal Reserve should bring its bond-buying program to a swift close, according to two of its most hawkish policymakers who take up voting power this year, with Dallas Fed chief Richard Fisher vowing to use his vote to support cuts to the program even if stocks, now near record highs, take a tumble.
The comments on Tuesday from Fisher and Charles Plosser, president of the Philadelphia Fed, come roughly two weeks before the U.S. central bank’s first policy meeting of the year. They suggest that incoming Chair Janet Yellen will face internal pressure to ramp up withdrawal of the extraordinary stimulus, which policymakers last month decided to trim to $75 billion a month from $85 billion.
PHILADELPHIA (Reuters) – Predicting more economic growth and a further drop in U.S. unemployment this year, a top U.S. central banker said on Tuesday he would prefer a quicker-than-planned withdrawal of policy stimulus.
Philadelphia Fed President Charles Plosser, whose hawkish views are well known at the Federal Reserve, downplayed a weak December jobs report and rebuffed concerns some of his colleagues have voiced over so many Americans having dropped out of the work force.
SAN FRANCISCO/NEW YORK (Reuters) – Stubbornly weak inflation is shaping up as the wild card for U.S. monetary policy makers this year, with top Federal Reserve officials stumped by why it has lingered so low for so long and at odds as to what to do about it.
As the Fed wrestled through last year with deciding when to start trimming its massive bond-buying stimulus, the bulk of attention was focused on the unemployment rate, which until recently has been slow to fall following its spike up to 10 percent during the recession.
INDIANAPOLIS/RALEIGH, North Carolina (Reuters) – Another cut to bond purchases appears in the offing this month despite data that showed U.S. jobs growth slowed sharply in December, two top Federal Reserve officials said on Friday.
The officials, from opposite sides of the U.S. central bank’s spectrum of policymakers, reinforced public perceptions that it would take a more significant slowdown in the labor market to convince the Fed to stop withdrawing stimulus.
(Reuters) – As the U.S. Federal Reserve’s top officials debated their decision to scale back a massive bond-buying stimulus program last month, they were keen to steer a delicate path.
Minutes of the Fed’s December 17-18 policy meeting, released on Wednesday, showed many members of the policy-setting Federal Open Market Committee wanted to proceed with caution in trimming the asset purchases, and most wanted to stress that further reductions were not on a preset course.
/PHOENIX, Arizona (Reuters) – Two top Federal Reserve officials said on Tuesday they expected the U.S. central bank to reduce its stimulus at a steady pace, with the lone official to dissent against the Fed’s decision to trim its bond buying saying he was comfortable with the approach.
Boston Fed President Eric Rosengren, who voted against the Fed’s decision last month to reduce its monthly bond buying by $10 billion, told Reuters the central bank should not take any “dramatic steps” to wind down asset purchases.
HARTFORD, Connecticut (Reuters) – The lone Federal Reserve official to dissent against the U.S. central bank’s decision to cut stimulus said on Tuesday he is nonetheless comfortable with the current approach of reducing bond-buying by $10-billion increments at each policy meeting.
In an interview, Boston Fed President Eric Rosengren warned against any “dramatic steps” to wind down the asset purchases and gave what might be the most detailed outline to date of what economic conditions might cause the U.S. central bank to veer from a uniform withdrawal of accommodation.