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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 26, 2013
via MacroScope

Post-Jackson Hole, Fed Septaper still appears on track

With all the QE-bashing that went on at the Federal Reserve’s Jackson Hole conference this year, it was difficult not to get the sense that, barring a major economic disappointment before its September meeting, the central bank is on track to begin reducing the monthly size of its bond purchase program, or quantitative easing.

If anything, the fact that this expectation has become more or less embedded in financial markets means that the Fed might as well go ahead and test the waters with a small downward adjustment of say, $10 billion, from the current $85 billion monthly pace, while waiting to see how employment conditions develop in the remainder of the year.

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 22, 2013
via MacroScope

The other big question at Jackson Hole

It will be a tough one to avoid. Federal Reserve Chairman Ben Bernanke’s absence from Jackson Hole is just one in a series of strong hints he will step down at the end of his second term in January. So, it is only natural that a lot of the talk on the sidelines of this year’s conference will inevitably revolve around the issue of his replacement.  

But there is another, potentially more important question that needs to be answered in the shadow of Wyoming’s majestic Grand Teton peaks: Why have top U.S. Fed officials, even dovish ones, become increasingly queasy about asset purchases despite falling inflation?

Aug 20, 2013
via MacroScope

Back when Yellen and Summers had the same boss

With all the back-and-forth in the Yellen versus Summers Fed chair showdown, it’s easy to forget that the two once played for the same team – the Clinton administration.

This incredible photo from the Reuters archive features many of the key players in U.S. economic policy over the last two decades, tracing the arch of the 1990s tech boom, the early 2000s housing surge and the financial crisis of 2008-2009. They include Fed Vice Chair Janet Yellen, then advisor to Clinton, and Larry Summers, then Deputy Treasury Secretary. Both are now seen as leading candidates to replace Ben Bernanke as Fed chair next year.

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.

    • 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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