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Apr 10, 2014

Fed’s Tarullo sees little need for rapid U.S. rate hikes

WASHINGTON (Reuters) – The modest pace of U.S. economic growth in recent years suggests that when the time comes to raise interest rates the Federal Reserve will be able to do so gradually without fear of a sudden surge in inflation, a top Fed official said on Wednesday.

Many economists, both at the Fed and outside, had expected the economy to roar back after the Great Recession, requiring a rapid tightening of policy at some point, Fed Board Governor Daniel Tarullo told a dinner forum in Washington, D.C.

Apr 9, 2014

At least six months between end of QE and rate rise: Fed’s Evans

WASHINGTON (Reuters) – The Federal Reserve will likely wait at least six months after ending a bond-buying program before raising interest rates, and will only act that quickly “if things really go well,” a top U.S. central banker said on Wednesday.

“It could be six, it could be 16 months,” Chicago Fed President Charles Evans told reporters on the sidelines of a Levy Economics Institute forum.

Apr 9, 2014

Fed officials fretted about hawkish ‘dots’ forecasts: minutes

WASHINGTON/SAN FRANCISCO (Reuters) – Federal Reserve policymakers fretted last month that investors would overreact to published forecasts that suggested a more aggressive cycle of interest rate increases was coming down the pike than they planned.

Minutes of the Fed’s March 18-19 policy-setting meeting released on Wednesday shed little new light on what might prompt an eventual policy tightening.

Apr 8, 2014

Fed policymakers want more clarity on rate-hike plans

/PHILADELPHIA (Reuters) – The Federal Reserve needs to be more specific about what economic conditions would prompt it to raise interest rates from current rock-bottom levels, a pair of top Fed officials normally at loggerheads on policy said on Tuesday.

A third, meanwhile, warned that the Fed should be sure not to withdraw monetary policy accommodation before the economy is ready.

Apr 8, 2014

Fed should be more specific about rate-hike plans: Plosser

PHILADELPHIA (Reuters) – The Federal Reserve should be even more specific about when it plans to tighten policies after it took a step in the right direction last month, a top U.S. central banker said on Tuesday.

Philadelphia Federal Reserve Bank President Charles Plosser said, however, that the central bank is “not even close to withdrawing support prematurely,” when asked by reporters about longer-term plans. He said the timing of the first rate rise, which will probably come next year, will be “all about the data.”

Apr 4, 2014

Leaving buyers club could be Fed’s next tricky task

SAN FRANCISCO/NEW YORK (Reuters) – With the wind-down of the Federal Reserve’s massive bond buying under way, policymakers are beginning to discuss the next stage – when to allow the U.S. central bank’s swollen balance sheet to shrink.

If the Fed sticks to a plan laid out in June 2011, a decision to stop reinvesting bond proceeds would precede any increase in interest rates and mark the beginning of the Fed’s first tightening cycle since 2004-2006.

Apr 3, 2014

Stein to step down from depleted Fed Board

NEW YORK, April 3 (Reuters) – Federal Reserve Governor
Jeremy Stein, who has spearheaded the debate over whether
monetary policy should be used to combat asset bubbles, will
step down from the U.S. central bank on May 28 to return to his
teaching post at Harvard University.

The departure, announced on Thursday, will open up a second
vacancy on the normally seven-person Fed Board, assuming the
U.S. Senate soon approves three nominees awaiting confirmation.

Apr 2, 2014

Amid rate-hike debate, Fed officials eye crystal ball

LOUIS/MIAMI (Reuters) – Two top policymakers said on Wednesday the Federal Reserve was in no rush to raise interest rates and would have to see improvements in the U.S. economy to do so.

The comments from St. Louis Fed President James Bullard and Dennis Lockhart of the Atlanta Fed, though not ground breaking, did reinforce the notion that accommodative monetary policies would remain in place for a while to come despite intense market speculation over the timing of tightening.

Mar 31, 2014

Yellen strongly defends easy Fed policies, cites U.S. labor slack

CHICAGO (Reuters) – Federal Reserve Chair Janet Yellen said on Monday the U.S. central bank’s “extraordinary” commitment to boosting the economy, especially the still struggling labor market, will be needed for some time to come.

Yellen, in her first public speech since becoming Fed chair two months ago, strongly defended the Fed’s policies of low interest rates and continued bond-buying. Citing the struggles of three American workers as examples, she said there remains “considerable” slack in the economy and job market, a sign that further monetary stimulus can still be effective.

Mar 27, 2014

Fed’s Dudley warns against explicit global policy coordination

NEW YORK (Reuters) – While explicit policy coordination among the world’s central banks is unfeasible, a more effective system should be developed to ensure they have access to foreign currency reserves in times of stress, a top U.S. Federal Reserve official said on Thursday.

“Monetary policy meant to suit everybody is likely in the end to suit nobody,” William Dudley, the influential head of the New York Fed, said in a speech that pushed back against criticism that aggressive U.S. policy accommodation has recklessly hurt emerging-market economies.