Washington Extra – Easy money

January 26, 2012

Some great news for all you borrowers today from the Fed. Interest rates are likely to remain around zero until at least late 2014. That’s later than previously expected, and to put things in perspective, it’s nearly two years into the term of the president who will be elected in November.

What it tells us is that the economy is still very vulnerable. Ben Bernanke said as much today: “I don’t think we’re ready to declare that we’ve entered a new, stronger phase at this point.” He left the door wide open to further Fed stimulus via bond purchases.

And Bernanke was almost apologetic about what this interest rate outlook means for another large swathe of the population: the savers. Take Maggie Smith, not the actress but a 74-year-old from New Jersey who watches her interest income on savings stagnate while home and car costs go up. After more than five years of rock-bottom rates, it’s no wonder she feels like she’s “being punished” for being prudent.

Here are our top stories from Washington…

Bernanke says Fed pondering further stimulus

Federal Reserve Chairman Ben Bernanke signaled the U.S. central bank may consider further monetary easing, after the central bank announced interest rates would remain near zero until late 2014. Bernanke also suggested the Fed might be willing to tolerate inflation above its newly unveiled official target of 2 percent if it means putting a dent in high unemployment.

For more of this story by Pedro da Costa and Mark Felsenthal, read here.

For a snap analysis by Mark Felsenthal, read here.

Insight: Today it pays to owe money, while U.S. savers suffer

Sometimes Maggie Smith worries that she may outlive her savings.”It’s an uncomfortable feeling to realize that everything is going up except your income,” said the 74-year-old from New Jersey. Rising home and car insurance costs forced her to dip into savings which have been earning less than 1.0 percent. That isn’t likely to change for some years. The Federal Reserve said it is likely to keep its key interest rate near zero until late 2014.

For more of this story by Karen Brettell and Steven C. Johnson, read here.

For Obama 2012, it’s all about the 99 percent

President Barack Obama threw red meat to his political base on Tuesday with a promise to do the nearly impossible: solve the problem of widening U.S. income inequality. Faced with the very real possibility of losing the White House in November, Obama used his State of the Union address to demand a tax increase for millionaires and launch an aggressive campaign arc built upon economic fairness.

For more of this story by Jeff Mason, read here.

Obama tax ideas face long odds ahead of election

President Barack Obama’s bid to get millionaires and multinational companies to pay more taxes may play well with many voters but it faces long odds in the deadlocked U.S. Congress. Obama used his State of the Union speech on Tuesday to press the case for a new minimum 30 percent tax on Americans earning more than $1 million a year and for tougher treatment of corporations that move jobs out of the United States.

For more of this story by Kim Dixon, read here.

Obama saw window of opportunity to free hostages

When President Barack Obama mysteriously congratulated his defense chief while making his way through the crowd awaiting the State of the Union address, the secret hostage rescue mission in Somalia was still being wrapped up. After days of planning, a U.S. assault team — including some forces from the Navy SEAL unit that killed Osama bin Laden last year — freed the American and Danish hostages and killed the kidnappers.

For more of this story by Phil Stewart and David Alexander, read here.

State Department says Keystone bill raises legal questions

A Republican proposal in the U.S. House of Representatives to strip President Barack Obama’s authority to rule on the permit for the Keystone XL Canada-to-Texas oil pipeline raises serious legal issues, a top State Department official said. Obama denied TransCanada’s application for the oil  pipeline on Jan. 18 because he said there was not enough time for the State Department to review an alternate route that would avoid a sensitive aquifer in Nebraska within a 60-day window set by Congress.

For more of this story Roberta Rampton, read here.

Washington veteran tops list for U.S. antitrust post

William Baer, a widely respected antitrust veteran, is the White House’s top choice to head the Justice Department’s antitrust division, legal sources said. Baer, a former chief of the Federal Trade Commission’s competition division with wide experience in private practice, currently leads the antitrust division of the law firm Arnold and Porter LLP.

For more of this story by Diane Bartz, read here.

From elsewhere…

Mixed reviews for Obama speech among Davos mighty

The rich and powerful were divided at their annual huddle on over Barack Obama’s threat to raise their taxes, with some saying it could hurt growth, but others arguing he was right to address capitalism’s imbalances. Obama’s State of the Union address was delivered on the eve of World Economic Forum in the Swiss ski resort of Davos, which found many of the world’s titans of industry and politics in reflective mood, focusing on whether capitalism needs to be fairer to survive.

For more of this story, read here.

For more stories from our Washington correspondents visit www.reuters.com and stay informed.

Photo Credits: REUTERS/Larry Downing (Bernanke at news conference); REUTERS/Jason Reed (Obama in Arizona); REUTERS/TransCanada Corp/Handout (Keystone pipeline under construction in North Dakota)

One comment

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The bigger picture I have in my mind shows that a underground transit system would be far more capable of supporting the highest speeds possible and perhaps without any rails at all depending in the turbulent nature of the air space between the moving object and the wall of the tunnel, the faster it goes the more stable it becomes. At a relative speed of 100 overdrive kicks in and the turbo nature of plasma thrusters enables a unrecordable speed as this would be the Ultimate for transit systems far better than a High-Speed Rail. If the world ever decides that monitoring the ocean for debris movement is feasible then there will be a project that can launch the Ultimate from its underground tunnel into the ocean depth and become the first sub rail-less system between continents, Only a tamed undercurrent would allow this to occur without any debris collision – you can call it a ninth sense of knowing the moment that our migration travel can occur while large ships would become less depended upon and faster shipments would occur. This is a future of opportunity not choice and not simply a change because the fuel of design is Methane Pellets for the Plasma Engines, not Oil, not Natural Gas, not CNG or LPG. The molecular bond of H20 slows down a object because of the friction and collective adhesion to the object without those two factors the object is a separate body within the water. Its not a Supersonic DeLorean car since it is a train that can travel on land, in the ground tunnel or under water without a tunnel at ultrasonic speed. Hull pressure is the navigation tool to harness a vast computer field for travel between continents. Pressure produces an electrical charge, the more pressure the more the electrical charge, so its the body of the train that is superimposed with an electrical charge that causes the vibration of the water and ultimately producing a micron gap between the body and the water like a envelope while plasma engines are the only exposed portion that is providing thrust then there is no friction. Maintaining a constant hull pressure on the exterior body of the train surface is accomplished via electrical charge so the ocean current has little effect on the mobility. Scientific advancement in modes of travel, not a ‘Time Machine’, would be introduced beyond those which are governed capitalistic commercial operations such that the High-Speed Rail has become to the states that cannot afford to build it and will depend on private contractors to fund the project Obama laid out instead of the Keystone XL Pipeline. I reconcile the rejection based on my ideology that pipelines should be regulated to a depth ordinance throughout their layout and not be different in anyway or circumstance with a slight variable of one foot minimum to a maximum of two feet for depth evaluation when the pipeline is sub-surface so there is no excuse for the terrain being unlevel to have thirty foot depth at a hill and one foot depth in a valley. That is my first observation, the second observation is that terrain is being consumed so let’s suppose for a minute that we could create a train that travels without tracks where we have a pipeline buried we have less a chance to use that terrain for a train to travel, regulated throughways are yet proposed for any mode of travel much less a train and I would prefer to keep a train below surface as that eliminates so many obstacles and enhances safety. Why spend America’s money on a train that has a short distance to travel High-Speed when a different mode of travel at High-Speed is more possible? Objects that can fly are a better objective for travel that objects that have to have a rail to travel on which is subjected to the climate change for many years that require either renewal or entire replacement of sections miles long because of the warping. Massive & expensive highway construction is another reason that railway was destined to be better but the atmosphere if not kept clean because of development one day creates a toxic network that cannot maintain its bottled up nature and treks between cities and states because of a mode of travel. It creates a environmental disaster years later requiring reconstituting the entire rail system every six to ten years, when do we begin to replace the cloud or make the air quality we need on earth. Congress is off topic, shaken by to many distractions to realize what future lies ahead we must begin to consider instead of tossing money into the wind and hoping that the jobs created will make up the difference. What is suppose to be gained, a new Congress maybe then bring it on now.

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