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Aug 29, 2013

Fed should cut back on mortgage buys in September, Lacker says

NEWPORT NEWS, Virginia (Reuters) – The U.S. Federal Reserve should begin reducing purchases of mortgage bonds, part of its monetary stimulus program, at its meeting next month, Richmond Fed President Jeffrey Lacker said on Thursday.

The outlook for the U.S. labor market had improved substantially since the Fed launched its most recent bond-buying stimulus last year, meeting the central bank’s stated precondition for a retreat from such purchases, Lacker said.

Aug 27, 2013

Who wants to be a millionaire? Likely next Fed chair already is

WASHINGTON (Reuters) – Lawrence Summers may be a poster-child for the lucrative revolving door between Wall Street and Washington. But Federal Reserve Vice Chair Janet Yellen, his chief opponent in the tight race to replace Ben Bernanke at the helm of the U.S. central bank, is not exactly struggling financially.

Yellen, a former university professor who until recently was seen as a favorite to take the top spot at the Fed when Bernanke’s second term ends early next year, holds assets worth between $3.8 million and $11.1 million, according to 2012 disclosure forms released on Tuesday. Including the holdings of her husband, a nobel-prize-winning economist, she owns between $4.8 million and $13.2 million worth of assets.

Aug 25, 2013

Emerging market slump highlights Fed’s global reach

, Aug 25 (Reuters) – The recent selloff in
emerging markets is a classic case of being careful what you
wish for.

When the Federal Reserve was ramping up its asset purchases
to support a flagging U.S. economy, many officials overseas
criticized the United States for putting undue upward pressure
on their currencies. Most memorably, Brazilian Finance Minister
Guido Mantega suggested rich countries were engaged in a
“currency war” or a race to devalue to gain a trade advantage.

Aug 24, 2013

Emerging countries must be able to control capital flows: study

JACKSON HOLE, Wyoming (Reuters) – Emerging market nations can be adversely affected by large swings in investment and, therefore, must develop tools to control credit flows or risk relinquishing any independent monetary policy, a study shows.

These findings were presented at the Kansas City Federal Reserve’s monetary policy symposium at Jackson Hole, which highlighted the global impact of the unconventional monetary policy of the United States and other major central banks.

Aug 23, 2013

Fed should focus on mortgage buys, sell Treasuries: study

JACKSON HOLE, Wyoming (Reuters) – The Federal Reserve should concentrate its unconventional monetary stimulus on mortgage asset purchases, according to a new study released on Friday, ditching Treasury bond buys which the authors say have not had much of an effect.

Presented at the Kansas City Fed’s annual Jackson Hole conference, the paper argues rather controversially that the central bank should begin its exit strategy by selling Treasuries, something that is hard to conceive given the recent speedy selloff in government bonds.

Aug 23, 2013

Central banks must consider spillover effects: Mexico’s Carstens

, Aug 23 (Reuters) – Central banks in rich
countries cannot ignore the international effects of their
policies, and conducting monetary policy in a vacuum could spark
another financial crisis, Mexico Central Bank Governor Agustin
Carstens said on Friday.

Speaking at the Kansas City Federal Reserve’s annual Jackson
Hole conference, Carstens warned about the dangers of a
mismanaged exit from unconventional monetary policies in
countries like the United States for their developing world
counterparts.

Aug 13, 2013

Fed could begin reducing bond buys in Sept -Lockhart

ATLANTA, Aug 13 (Reuters) – The Federal Reserve could begin
reducing its bond-buying stimulus as early as its September
meeting despite inflation being below target, Atlanta Fed
President Dennis Lockhart said on Tuesday.

U.S. economic performance remains too mixed for Federal
Reserve policymakers to lay out a detailed path for reducing and
eventually halting their asset-purchasing program next month,
Lockhart said.

Aug 13, 2013

Too early to lay out full exit from asset buys: Fed’s Lockhart

ATLANTA (Reuters) – U.S. economic performance remains too mixed for Federal Reserve policymakers to lay out a detailed path for reducing and eventually halting their asset-purchase stimulus plan at their September meeting, a top Fed official said on Tuesday.

Still, Atlanta Fed President Dennis Lockhart did not rule out some kind of decrease next month in the $85 billion monthly pace of bond buys currently under way. He simply suggested this would be a decision to be adjusted over time, not the beginning of a pre-ordained pullback.

Aug 5, 2013

Shrunken workforce gives Fed added policy headroom

WASHINGTON (Reuters) – So many workers have left the job market in recent years that the decline in the official unemployment rate to 7.4 percent last month may understate the extent of weakness in employment prospects.

This gives Federal Reserve officials considerable room to keep interest rates near zero, potentially well beyond current expectations of rate increases beginning in 2015.

Jul 25, 2013

A failure to communicate – Fed ‘guidance’ fails early test

WASHINGTON (Reuters) – Watch what Federal Reserve officials do, not what they say. That was Wall Street’s reaction to the U.S. central bank’s hints that it could soon begin to wind down its bond-buying stimulus.

Rather than heed Fed Chairman Ben Bernanke’s reassurance that the end of quantitative easing would not presage an imminent rise in interest rates, the bond market pushed borrowing costs sharply higher, a sign the central bank’s reliance on “forward guidance” may not be working as intended.

    • 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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