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Oct 15, 2012

Lacker says Fed shouldn’t overdo stimulus

ROANOKE, Virginia (Reuters) – The Federal Reserve’s latest monetary stimulus risks unwanted inflation and will not do much for economic growth, Richmond Fed President Jeffrey Lacker said on Monday.

Lacker, an inflation hawk who has dissented at every policy meeting this year, said a troubled U.S. labor market was being dampened by factors outside the control of Fed officials.

Oct 14, 2012

Federal Reserve’s Bernanke says U.S. stimulus also a boon for global growth

WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke on Sunday denied the U.S. central bank’s highly stimulative monetary policy hurts emerging economies, saying stronger growth in the United States bolsters global prospects as well.

Bernanke has often defended Fed actions against domestic critics, who argue the policy of keeping interest rates near zero while ramping up asset purchases hurts savers and risks future inflation.

Oct 12, 2012

Lacker says Fed stimulus will do little for economy

WASHINGTON (Reuters) – The Federal Reserve’s new round of monetary stimulus is unlikely to do much for economic growth without a damaging rise in inflation, Richmond Fed Bank President Jeffrey Lacker said on Friday.

Lacker, an inflation hawk and the lone dissenter on this year’s Federal Open Market Committee, said he opposed the announcement in September of an open-ended bond-buying program targeting $40 billion in mortgage securities per month.

Oct 11, 2012
via MacroScope

Too big to exist? Fed’s regulation czar backs limits on bank size


Regional Federal Reserve Bank presidents who oppose quantitative easing have made little way in convincing the central bank’s dovish core. Apparently, not so on the cause célèbre of policymakers like Richard Fisher at the Dallas Fed, who have called for too big to fail banks to be broken up.

In a speech this week, Fed board governor and regulation czar Daniel Tarullo stopped short of calling for outright break-ups. But he did take the unprecedented step of backing size limitations on banks that would be linked to overall U.S. economic output.

Oct 11, 2012

Fed’s Stein says firmly backs QE3, low rates pledge

WASHINGTON, Oct 11 (Reuters) – U.S. unemployment remains
“painfully high” while inflation is not an immediate concern,
giving the Federal Reserve plenty of reason to launch a new
stimulus last month, a top Fed official said on Thursday.

Jeremy Stein, in his first keynote speech since becoming a
Fed governor in May, said he strongly supported the U.S. central
bank’s decision to embark on a new, open-ended bond-buying

Oct 11, 2012

Fed’s Stein says firmly behind latest stimulus

WASHINGTON (Reuters) – U.S. unemployment remains “painfully high” while inflation is not an immediate concern, giving the Federal Reserve plenty of reason to launch a new stimulus last month, a top Fed official said.

Jeremy Stein, in his first keynote speech since becoming a Fed governor in May, said he strongly supported the central bank’s decision to embark on a new, open-ended bond buying program.

Oct 11, 2012

Fed’s Yellen says Europe, housing strains stifling U.S. recovery

WASHINGTON (Reuters) – The U.S. economic recovery continues to be hampered by spillover effects of the European crisis and a downtrodden housing market, Federal Reserve Vice Chair Janet Yellen said on Thursday.

Yellen, Fed Chairman Ben Bernanke’s influential no. 2 at the central bank’s board, said the world’s major economies were all slow to mend from the massive shock of the financial crisis and recession of 2007-2009.

Oct 9, 2012
via MacroScope

Europe’s reactive leadership

Spain doesn’t need financial help. That was the verdict from euro zone ministers on Monday – quickly followed by a selloff in Spanish stocks and bonds on Tuesday. The trouble with that line of thinking is that it again leaves policymakers behind the curve, reacting to events rather than preempting them, write currency strategists at Brown Brothers Harriman in a research note:

For several weeks now Germany Finance Minister Schaeuble has argued against the need for Spain to request aid. France and Italy, in contrast, have been reportedly encouraging Spain to ask for assistance, which they assume would ease financial pressures within the region as whole. The Eurogroup meeting of euro area finance ministers endorsed Schaeuble’s position. Spain is taking necessary measures to overhaul the economy, they said.  Spain is able to successfully fund itself in the capital markets. Aid is simply not needed now.

Oct 5, 2012
via MacroScope

Fed speak galore

The pace of Federal Reserve speeches intensifies next week, with Vice Chair Janet Yellen kicking off the calendar on Tuesday with a speech on financial stability. Yellen will be speaking in Tokyo at an IMF meeting panel. The cacophony picks up on Wednesday, with remarks from Minneapolis Fed president and recent dovish convert Narayana Kocherlakota, the board’s regulation-czar Dan Tarullo and the ever hawkish Richard Fisher from Dallas. On Thursday, Yellen will directly address monetary policy in another speech, while board governors Jeremy Stein and Sarah Raskin offer a rare peak into their macroeconomic views. Philadelphia Fed President Charles Plosser and Jim Bullard of the St.Louis Fed, both of whom have opposed QE3, are also on tap. Jeff Lacker, the lone dissenter on this year’s FOMC, will close the week on Friday.

Oct 4, 2012

Divided Fed considers numerical triggers for rates policy

WASHINGTON, Oct 4 (Reuters) – The U.S. Federal Reserve may
adopt numerical thresholds for inflation and joblessness that
would serve as guideposts for policy, according to minutes from
a September meeting that revealed some reticence about the
central bank’s latest stimulus.

The Fed last month launched a third round of large-scale
bonds buys, announcing an open-ended program that kicks off with
$40 billion per month of new mortgage debt purchases.

    • 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:
      English, Portuguese, Spanish, French
      2011 Deadline Club Award from the Society of Professional Journalists' New York Chapter
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