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Sep 19, 2012

Fed committed to growth push despite internal discord

By Pedro Nicolaci da Costa

(Reuters) – A string of speeches from top Federal Reserve officials on Tuesday suggested the U.S. central bank is willing to be aggressive in its drive to beef up economic growth, yet also highlighted a small but vocal minority opposing fresh stimulus.

As Fed policymakers took to the podium following their announcement of an open-ended bond-buying program last week, William Dudley, the New York Federal Reserve Bank’s influential president, said officials are committed to accelerating the pace of economic recovery.

Sep 17, 2012
via MacroScope

Safe-haven Canada

The European crisis has thinned the ranks of countries considered safe-havens for investors, and may be contributing to an increase in foreign ownership of Canadian assets. Canada, whose comparatively robust banking sector helped it weather the 2008-2009 financial crisis better than many peers, saw capital inflows in July that helped reverse a June decline, according to the latest figures.

Foreigners resumed their net purchases of Canadian securities in July, taking on C$6.67 billion ($6.88 billion) after having reduced their holdings by C$7.76 billion in June, Statistics Canada said on Monday. Canadian authorities have said foreign investors view Canada as a safe haven. So far this year foreigners have made C$41.23 billion in net purchases, a substantial amount though down from C$54.31 billion seen in the first seven months of 2011.

Sep 13, 2012

Fresh Fed stimulus seen, details in question

WASHINGTON (Reuters) – The U.S. Federal Reserve appears set to launch a third round of unconventional monetary stimulus on Thursday while signalling that a weak U.S. economy may warrant ultra-low interest rates for at least another three years.

Not everyone believes the Fed will embark on another bond- buying spree, and plenty of doubts remain about the likely efficacy of such a move.

Sep 13, 2012

Fed seen launching QE3, details in question

WASHINGTON (Reuters) – The U.S. Federal Reserve appears set to launch a third round of unconventional monetary stimulus on Thursday while signaling that a weak U.S. economy may warrant ultra-low interest rates for at least another three years.

Not everyone believes the Fed will embark on another bond- buying spree, and plenty of doubts remain about the likely efficacy of such a move.

Sep 13, 2012

Fed seen launching fresh stimulus, details in question

WASHINGTON (Reuters) – The U.S. Federal Reserve appears set to launch a third round of unconventional monetary stimulus on Thursday while signaling that a weak U.S. economy may warrant ultra-low interest rates for at least another three years.

Not everyone believes the Fed will embark on another bond- buying spree, and plenty of doubts remain about the likely efficacy of such a move.

Sep 9, 2012

Jobs rut tips scales in favor of Fed stimulus

WASHINGTON (Reuters) – The Federal Reserve looks set to launch a third round of bond purchases this week to try to drive borrowing costs lower and breathe more life into an economy that is not growing fast enough to lower unemployment.

Despite political opposition and some internal dissent, economists said a weak report on jobs growth for August was likely enough to convince the U.S. central bank a looser monetary policy was needed.

Sep 5, 2012
via MacroScope

Help not wanted: U.S. online job ads see biggest two-month decline since recession

U.S.job seekers saw online job ads dwindle this summer, according to a survey from The Conference Board. Advertised vacancies fell 108,700 in August to 4,684,800, the industry group said.

Jonathan Basile at Credit Suisse noted that the combined drop of 262,000 jobs for July and August was the biggest two-month decline since the last recession.

Aug 2, 2012
via MacroScope

Weak manufacturing orders tend to precede U.S. recessions

U.S. manufacturing activity shrank for a second straight month in July as recent economic weakness spilled into the third quarter, according to the Institute for Supply Management’s closely watched index. But that wasn’t the worst of it: new orders, a gauge of future business activity, also shrank for a second month, albeit at a slightly slower pace.

Tom Porcelli at RBC explains why the status quo may not be good enough to keep the economy expanding:

Aug 1, 2012
via MacroScope

Who would benefit from floating-rate Treasury notes?

The U.S. Treasury Department announced on Wednesday it would begin issuing floating rate notes (FRNs), even if such a new program is at least a year away from implementation. The rationale behind these short-term securities is to give investors protection against the possibility of a sudden spike in interest rates. The Federal Reserve has held overnight rates near zero since late 2008, helping to anchor borrowing costs of all maturities.

But is issuing variable rate securities really a good idea from the taxpayers’ standpoint? Stephen Stanley, chief economist at Pierpoint Securities, thinks not. He believes Treasury officials are getting played by sell- and buy-side investors and their respective vested interests. The Treasury has made the decision in part due to the recommendations of the Treasury Advisory Borrowing Committee (TBAC), made up exclusively of members of the financial industry.

Aug 1, 2012

Treasury may let investors pay to lend

WASHINGTON (Reuters) – The Treasury is working on allowing investors to bid on securities that offer negative interest rates, another sign that officials expect borrowing costs to stay very low for a long time.

The government also is planning to issue floating-rate notes for the first time, but said such securities would not be brought to market for at least another year.

    • About Pedro

      "Pedro da Costa has been covering economics and financial markets since 2001. He is currently based in Washington and focuses on the Federal Reserve and macroeconomic policy. Da Costa earned a Master's in international relations at the University of California San Diego and studied sociology and political science as an undergraduate at the University of Chicago and the London School of Economics. He grew up in Rio de Janeiro, Brazil."
      Joined Reuters:
      2001
      Languages:
      English, Portuguese, Spanish, French
      Awards:
      2011 Deadline Club Award from the Society of Professional Journalists' New York Chapter
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