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Feb 21, 2014

Records show Fed on edge during darkest days of 2008 crisis

Feb 21 (Reuters) – Federal Reserve policymakers, in an
emotional meeting on one of the darkest days of the 2008
financial crisis, were worried the failure of Lehman Brothers a
day earlier would wreak havoc on a teetering financial system
but feared cutting already low interest rates might prove an
over-reaction.

Transcripts of the U.S. central bank’s meeting on Sept. 16
of that year, released on Friday, showed then Fed Chairman Ben
Bernanke flatly telling his colleagues he was philosophically
torn about the collapse of the investment bank.

Feb 21, 2014
Feb 20, 2014
Feb 20, 2014

Markets flooded with cash, should Fed prep to stamp out risk?

NEW YORK (Reuters) – A debate is growing louder within the Federal Reserve over whether it should stand ready to raise interest rates to prick any risky asset bubbles that its regulatory tools might fail to address.

The 2007-2009 financial crisis left many wondering whether the U.S. central bank should have more boldly tightened policy in the preceding years to head off the explosion of risky mortgage debt on Wall Street.

Feb 20, 2014

Fed’s balance sheet ‘exit strategy’ needs refreshing -Williams

NEW YORK, Feb 19 (Reuters) – The U.S. Federal Reserve should
update its longer-term “exit strategy” for winding down its
swollen balance sheet to reflect changes in the plan since it
was published in 2011, a top Fed policymaker said on Wednesday.

“It would be good to update this,” San Francisco Fed
President John Williams told reporters when asked about
refreshing the strategy. “When the world changes, we have
changed our plan in an appropriate way.”

Feb 20, 2014
Feb 20, 2014
Feb 20, 2014
Feb 19, 2014

Fed officials see more QE cuts, changes to low-rate vow

LOUIS, Feb 19 (Reuters) – Three Federal Reserve
officials on Wednesday said they believe the U.S. economy is
gaining traction despite a recent slowdown from cold weather,
allowing the central bank to stick to its plan to wind down its
massive bond-buying stimulus this year.

The comments, from the heads of the Federal Reserve banks of
St. Louis, San Francisco and Atlanta, freshen the message in the
minutes of the Fed’s most recent policymaking meeting, also
released Wednesday, which showed many thought only a big change
in outlook could scupper further measured reductions in
purchases.

Feb 19, 2014

Fed officials stress predictable cuts to stimulus: minutes

By Jonathan Spicer

(Reuters) – Several Federal Reserve policymakers wanted to drive home the idea that their asset-purchase program would be trimmed in predictable, $10-billion steps unless there is a big economic surprise this year, according to minutes of their last meeting.

Minutes of the Fed’s January 28-29 policy meeting, released on Wednesday, showed the officials were nearing a decision on how to adjust a promise to keep interest rates low for a while to come, including the possibility of incorporating financial stability concerns in that promise.