ST LOUIS/ BOISE, Idaho (Reuters) – While officials of the Federal Reserve have sparred over whether the U.S. central bank should continue full-bore with its massive bond-buying stimulus, two Fed officials with differing policy views agreed on Thursday that a national debt default could have devastating effects.
Budget gridlock at the U.S. Congress led to an October 1 partial government shutdown that threatens to hurt economic growth and has already delayed the release of key economic data such as the September jobs report. Lawmakers are now locked in debate over how to raise the government’s borrowing limit and avoid a U.S. debt default on October 17.
LOUIS (Reuters) – The Federal Reserve is less likely to reduce its bond-buying program this month given the U.S. government shutdown and resulting lack of economic data, as well as the ongoing debate over the debt ceiling, a top central bank policymaker said on Thursday.
St. Louis Fed President James Bullard, a voter on policy this year, said the fiscal problems in Washington have “changed the odds” on whether the central bank will trim the monthly $85-billion (53.2 billion pounds) quantitative easing program (QE) at a meeting set for October 29-30.
LOUIS (Reuters) – A reduction in the Federal Reserve’s bond-buying program is less likely to take place later this month given the U.S. government shutdown and resulting lack of economic data, as well as the ongoing debate over the debt ceiling, a top central bank policymaker said on Thursday.
St. Louis Fed President James Bullard, a voter on policy this year, said the fiscal problems in Washington have “changed the odds” on whether the central bank will trim the monthly $85-billion quantitative easing program at a meeting set for October 29-30.
WASHINGTON/NEW YORK (Reuters) – U.S. Treasury and Federal Reserve officials worried about the growing possibility of a catastrophic default are crafting contingency plans to mitigate the economic fallout if Congress fails to extend America’s borrowing authority, a source familiar with the plans said.
With just eight days before the Treasury Department says the U.S. will hit its $16.7 trillion borrowing limit, lawmakers and the White House remain far from a deal to extend it. Officials are examining what options might be available to calm financial markets if a U.S. debt payment is missed.
NEW YORK/SAN FRANCISCO (Reuters) – The Federal Reserve’s shock decision last month not to reduce its support for the U.S. economy was a “relatively close call” for policymakers, according to minutes of the meeting that also suggested there was still broad support to trim bond-buying this year.
Since last month’s meeting, the outlook for scaling back bond purchases has grown cloudier.
/NEW YORK (Reuters) – A Federal Reserve official known for her centrist views said on Tuesday she wanted to reduce the U.S. central bank’s asset purchases last month, adding her voice to the Fed’s so-called policy hawks who have spoken out against the shock decision to leave monetary policy unchanged.
The admission by Sandra Pianalto, who is retiring as president of the Cleveland Fed early next year, may come as a surprise given her long-standing support of Chairman Ben Bernanke’s concerted effort to boost the U.S. economy in the wake of the Great Recession.
(Reuters) – A top Federal Reserve official on Tuesday added her voice to those at the U.S. central bank who wanted to reduce asset purchases last month, though she stressed that “very supportive” policies remain essential to support the economy.
“For me the improvement in labor markets seemed substantial enough to support a scaling back of the asset purchase program at last month’s FOMC meeting,” said Cleveland Fed President Sandra Pianalto, who does not have a vote on policy this year, and who is retiring early next year.
(Reuters) – Janet Yellen found love at the Federal Reserve. She met him at a luncheon in 1977, launching a whirlwind romance that led to marriage in less than a year.
In connecting with George Akerlof, then on a temporary assignment at the Fed’s research division in Washington, Yellen discovered not just a soul mate but an intellectual equal with similar views about the societal impact of economic policy.
(Reuters) – Once the Federal Reserve reduces its bond-buying program, it could then wait “a number of years” before it raises interest rates, an influential official at the U.S. central bank said on Friday.
The two things “are very loosely connected,” said New York Fed President William Dudley. “The amount of time that can pass between the decision to begin to taper and actually raising short-term interest rates could easily be a number of years.”
NEW YORK (Reuters) – A top Federal Reserve official on Friday took a swipe at a fellow U.S. regulator’s proposal to rein in money market mutual funds, saying a key part of the Securities and Exchange Commission’s plan is a step backward and should be ditched.
Eric Rosengren, president of the Boston Fed branch who has long called for reform in the $2.5-trillion industry, took aim at one part of the SEC’s two-part plan to protect investors in times of stress like the 2008 financial crisis.