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Apr 29, 2015

Fed meeting seen as chance to nudge markets on rate hike timing

WASHINGTON (Reuters) – As the Federal Reserve’s policy-setting committee wraps up its third meeting of the year, a critical task awaits the U.S. central bank: narrowing the wide gap between how it and the markets view the path of interest rates.

The Fed previously ruled out raising rates at the end of its two-day meeting on Wednesday, and the chances of a hike at the June meeting, while still on the table, have steadily decreased amid a drum-beat of weak first-quarter economic data.

Apr 29, 2015

Drop in disability rolls adds to signs of US labor market recovery

WASHINGTON, April 29 (Reuters) – The number of Americans on
disability has declined for six months in a row in a sharp
turnaround after years of increases, more evidence of the labor
market recovery the Federal Reserve wants to see before nudging
interest rates higher.

Social Security disability rolls have climbed since the
1980s as the U.S. population has grown older and soared during
and after the global financial crisis. That stoked fears that
shrinking workforce will stunt the economy’s future growth.

Apr 23, 2015

Market liquidity drought raises alarm bells inside Fed

WASHINGTON/NEW YORK, April 23 (Reuters) – Sections of the
U.S. financial system that may be vulnerable to investor panic
are raising concerns inside the Federal Reserve, as policymakers
preparing for the first interest-rate hike in nearly a decade
seek to ensure the market is ready and able to handle it
whenever it happens.

Years of Fed bond-buying and new bank rules are seen to have
left the ultra-liquid U.S. Treasuries market more vulnerable to
an abrupt selloff. But in particular, the Fed is worried whether
the booming asset management industry can withstand a run of
redemptions in a financial crisis.

Apr 23, 2015

Fed eyes ability of asset managers to repay in a panic

WASHINGTON/NEW YORK (Reuters) – Sections of the U.S. financial system that may be vulnerable to investor panic are raising concerns inside the Federal Reserve, as policymakers preparing for the first interest-rate hike in nearly a decade seek to ensure that the market is ready and able to handle it whenever it happens.

The Fed is particularly worried about whether the booming asset management industry can withstand a run of redemptions in a financial crisis.

Apr 10, 2015

Fed’s Lacker says no shame in returning to zero after June hike

By Michael Flaherty

SARASOTA, Fla. (Reuters) – Federal Reserve official Jeffrey Lacker on Friday repeated his call for the central bank to consider hiking interest rates in June, and said there was no shame in adjusting them lower again if economic data demanded it.

“If we were to raise rates, and then subsequently reduce them to zero, it might be unexpected, but presumably we’re setting rates where we ought to be,” Richmond Fed President Jeffrey Lacker said in a question and answer session to reporters after a speech here. “I don’t see it as problematic to reduce rates having raised them once.”

Apr 10, 2015

Richmond Fed chief Lacker says no shame in returning to zero after June hike

By Michael Flaherty

SARASOTA, Fla. (Reuters) – Federal Reserve official Jeffrey Lacker on Friday repeated his call for the central bank to consider hiking interest rates in June, and said there was no shame in adjusting them lower again if economic data demanded it.

“If we were to raise rates, and then subsequently reduce them to zero, it might be unexpected, but presumably we’re setting rates where we ought to be,” Richmond Fed President Jeffrey Lacker said in a question and answer session to reporters after a speech here. “I don’t see it as problematic to reduce rates having raised them once.”

Apr 9, 2015

Senate seen waiting for Obama until Fed nominee hearing called: sources

WASHINGTON (Reuters) – The Senate Banking Committee is expected to wait to hold a hearing for the nomination of a community banker to the Federal Reserve until the White House moves to fill the central bank’s other open seat, according to people familiar with the matter.

Waiting gives committee Chairman Richard Shelby more time and options to put his stamp on the central bank, as the Fed still has a seventh empty board seat to fill. Another vacancy at the Fed board is the vice chairman for Supervision, a position created by the 2010 financial reform law known as Dodd-Frank that the White House has yet to fill.

Apr 1, 2015

More permanent role seen for Fed’s repurchase program

By Michael Flaherty and Howard Schneider

STONE MOUNTAIN, Ga. (Reuters) – A pledge by the U.S. Federal Reserve to phase out a new tool to lift interest rates is being challenged by economists and financial professionals who think the central bank may need to keep using it longer than Fed officials expect.

As the Fed approaches an interest rate hike – expected later this year – it will use a suite of tools, including an overnight reverse repurchase facility (ON RRP) for money market funds to help lift its traditional federal funds rate from near zero.

Apr 1, 2015

U.S. regulators struggle in effort to tackle shadow banking

By Michael Flaherty and Howard Schneider

(Reuters) – U.S. financial regulators are struggling to
agree on how to tackle the huge network of lenders operating
outside of traditional banking channels, as worries grow that
the lack of oversight over this system is increasing systemic
risks.

While the Federal Reserve has vowed to ramp up its efforts
to rein in the risks posed by non-bank lenders, defining the
sector known as “shadow banks,” and forming a strategy to
regulate it continues to elude the central bank.

Mar 31, 2015

Fed’s Fischer floats shadow bank regulation framework

By Michael Flaherty and Howard Schneider

STONE MOUNTAIN, Ga. (Reuters) – A top U.S. Federal Reserve official on Monday suggested stress tests and certain capital requirements to contain the risks within the non-bank lending sector, while acknowledging there is little the central bank can do to impose such restrictions.

Fed Vice Chairman Stanley Fischer offered a framework to more tightly regulate the lending activities of hedge funds, mutual funds and other non-bank entities – often referred to as shadow banks – though he was careful to show that he was offering suggestions and not potential central bank rules.

    • About Michael

      "In June 2009, Michael Flaherty became a Chief Correspondent for Reuters News, leading a team of journalists who cover investment banking, mergers & acquisitions, private equity and hedge funds, equity capital markets, natural resources and property across Asia. He arrived in Hong Kong in Feb. 2008 as Reuters' Asia Financial Services correspondent, covering the investment banks and M&A. Flaherty was hired by Reuters in New York in Dec. 2003. He was voted Reuters Journalist of the Year for his 2007 coverage of the U.S. private equity boom and bust. He started at Reuters with the consumer group covering office retailers ..."
      Joined Reuters:
      Dec. 1, 2003
      Awards:
      Peninsula Press Club, 2002, Reuters Journalist of the Year, 2007, M&A International, 2007
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