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May 8, 2014

Could take 5-8 years to shrink Fed portfolio: Yellen

NEW YORK/WASHINGTON (Reuters) – The U.S. Federal Reserve is in no rush to decide the appropriate size of its balance sheet, but if it ultimately shrinks it to a pre-crisis size, the process could take the better part of a decade, Fed Chair Janet Yellen said on Thursday.

Yellen, in testimony to a Senate panel, said no decision had yet been made on the central bank’s portfolio of assets, which has swollen to $4.5 trillion from about $800 billion in 2007.

Apr 27, 2014

Fed, with bond taper on autopilot, free to tackle big questions

SAN FRANCISCO/NEW YORK (Reuters) – Federal Reserve policymakers this week are set to continue paring their massive bond-buying stimulus, but below the smooth surface of a likely unanimous vote lies a deeply divided Fed struggling to lay the groundwork for more difficult decisions ahead.

Fed Chair Janet Yellen hinted at the U.S. central bank’s broad agenda a couple weeks ago when she laid out three “big” issues officials need to track: the level of slack in the labor market, whether inflation is rising back toward the Fed’s 2 percent goal, and the factors that could derail the economic recovery.

Apr 25, 2014
via MacroScope

Scrambling to flesh out skeleton Fed board

Photo

“It’s about time” was the general reaction when on Thursday the Senate Banking Committee scheduled a vote on Barack Obama’s nominees for the Federal Reserve board. Not that Stanley Fischer, Lael Brainard and Jerome Powell (a sitting governor who needs re-confirmation) have been waiting all that long; it was January that the U.S. president nominated them as central bank governors, and only a month ago that the trio testified to the committee. The urgency and even anxiety had more to do with the fact that only four members currently sit on the Fed’s seven-member board and one of those, Jeremy Stein, is retiring in a month. The 100-year old Fed has never had only three governors, and the thought of the policy and administrative headaches that would bring was starting to stress people out. After all, the Fed under freshly-minted chair Janet Yellen is in the midst of its most difficult policy reversal ever.

“Boy it would be more comfortable if there were at least five governors and hopefully more” to help Yellen “think through these very difficult communications challenges,” said Donald Kohn, a former Fed vice chair.¬†Former governor Elizabeth Duke, who stepped down in August, said one of the Fed board’s strengths is its diversity of members’ backgrounds. “With fewer people you don’t have as many different points of view on policy,” she said in an interview.

Apr 24, 2014

Senate panel to vote on Fischer, other Fed nominees on Tuesday

NEW YORK/WASHINGTON (Reuters) – The Senate Banking Committee will vote next week on three nominees to the Federal Reserve’s board, including Stanley Fischer for vice chairman, in a big step toward bulking up the U.S. central bank’s depleted ranks.

In addition to Fischer, the panel will vote on Tuesday on the nominations of former senior U.S. Treasury official Lael Brainard and current Fed Governor Jerome Powell, who has been nominated for another term.

Apr 23, 2014

Exclusive: White House considers former banking lawyer for Fed board – sources

NEW YORK/WASHINGTON (Reuters) – A former lawyer with the American Bankers Association is being considered by the White House as a possible nominee to the board of the Federal Reserve, according to sources familiar with the efforts

The lawyer’s name emerged as the White House weighs candidates with community banking backgrounds to fill gaps on the Federal Reserve’s powerful but depleted board, the sources said.

Apr 23, 2014

White House considers former banking lawyer for Fed board -sources

NEW YORK/WASHINGTON, April 23 (Reuters) – A former lawyer
with the American Bankers Association is being considered by the
White House as a possible nominee to the board of the Federal
Reserve, according to sources familiar with the efforts

The lawyer’s name emerged as the White House weighs
candidates with community banking backgrounds to fill gaps on
the Federal Reserve’s powerful but depleted board, the sources
said.

Apr 17, 2014

Fed logged $84 bln profit on its bonds last year

NEW YORK, April 17 (Reuters) – The Federal Reserve logged
$84 billion in net profit last year on its massive portfolio of
assets, and average income will probably remain higher than
before the financial crisis for another decade to come,
according to an annual report.

While the New York Fed’s report on its open market
operations, released on Thursday, painted an optimistic picture
of what could be a thorny political issue for the U.S. central
bank, it noted that the portfolio would have logged an
unrealized loss of $53 billion had the Fed been forced to “mark
to market” its assets, as private firms do under law.

Apr 16, 2014

Weak U.S. prices, not inflation, the threat now – Fed’s Yellen

NEW YORK (Reuters) – Persistently low inflation poses a more immediate threat to the U.S. economy than rising prices, Federal Reserve Chair Janet Yellen said on Wednesday, stressing that the U.S. central bank would be delivering policy stimulus for some time to come.

In her second public speech since taking the Fed’s helm, Yellen was careful not to predict when interest rates would rise from near zero. Instead, she stressed the decision would hinge on healing in the labour market and on how briskly inflation rises toward the Fed’s 2 percent goal.

Apr 16, 2014

Yellen says full U.S. employment coming into view, slowly

NEW YORK (Reuters) – Federal Reserve Chair Janet Yellen said on Wednesday the U.S. economy appeared to be slowly moving toward full employment, but that it would need help from the central bank for some time to come. In her second public speech since taking the Fed’s helm, Yellen said it was “quite plausible” the economy would be back to near full employment and a healthier level of inflation by the end of 2016.

“I do think we are seeing very meaningful progress, although clearly … the goal has not been achieved at this point,” she told the Economic Club of New York.

Apr 16, 2014

Yellen stresses employment, inflation in Fed’s coming decision

NEW YORK (Reuters) – The Federal Reserve’s still distant decision to raise interest rates will depend on how far the U.S. economy remains from the central bank’s employment and inflation goals, and how long it will likely take to meet them, Fed Chair Janet Yellen said on Wednesday.

Yellen, in her second public speech as Fed chair, largely restated the U.S. central bank’s stance, stressing that it would respond to shifting economic conditions as it judges when to finally tighten monetary policy after years of unprecedented stimulus.