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Federal Reserve Chairman Ben Bernanke Not Worried About Inflation
Federal Reserve Chairman Ben S. Bernanke said yesterday (Wednesday) that he expects inflation to be “quite low for some time,” but that the Federal Open Market Committee will begin publishing its long-term inflation forecasts to promote transparency.
A steep drop in commodities prices has dampened inflation expectations significantly in recent months. But despite declines in consumer and producer prices, the Fed’s monetary base – the amount of total amount of a currency that is either in the hands of the public or in the central bank’s reserves – has expanded by 80% in the past six months.
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FOMC Meeting Offers No Solutions; First Wells Fargo Loss Since 2001; Total Buys Oil-Sands Explorer; AT&T Posts 4Q Decline; Boeing to Double Job Cuts; Time Warner Cuts 700 Jobs; UBS Reduces Bonuses; Ford’s Fourth-Quarter Loss
- The Federal Open Market Committee yesterday (Wednesday) left its benchmark Federal Funds rate at a range of 0% to 0.25%. “Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending,” the FOMC said in statement. “Furthermore, global demand appears to be slowing significantly.” The Fed said that it continues to “purchase large quantities of agency debt and mortgage-backed securities,” and…
Fed’s Out of Control!
Oct. 29 (Bloomberg) — The Federal Reserve cut its benchmark interest rate by half a percentage point to 1 percent, matching a half-century low, in an effort to avert the worst U.S. economic downturn in the postwar era.
We U.S. government and Federal Reserve continue to give us signs as to where they stand, where we’re going, and how were going to get there. Cutting the Fed Funds Rate to 1%, is just one more step towards zero, or next to zero interest rates.
Big Cut, Big Deal, of Big Woop?
This was not a big surprise, and the only question coming into…
30Oct2008 | Oxbury Research | Comments Off | ContinuedFed Holds Rate Steady in Face of Volatile Markets
Citing balanced threats from weak economic growth and inflation, the U.S. Federal Reserve yesterday (Tuesday) voted to hold the benchmark Federal Funds rate at 2.0%, despite a financial market that has been rocked in recent days by the continued fallout of the credit crisis.
“Downside risks to growth and the upside risk to inflation are both of significant concern,†the policymaking Federal Open Market Committee (FOMC) said in its statement yesterday. “The committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.â€
The FOMC statement openly acknowledged the many downside…
17Sep2008 | Money Morning | Comments Off | ContinuedFederal Reserve Policymakers Stand Up to Wall Street’s Easy-Money Crowd
The U.S. central bank’s Federal Open Market Committee (FOMC) yesterday (Tuesday) left the benchmark Federal Funds rate target at 2.0%, after many had expected the central bank policymaking committee to cut rates in the wake of the Lehman Brothers Holdings Inc. (LEH) collapse.
What’s more, the statement that was issued after the policymaking meeting was somewhat “hawkish,†suggesting that the U.S. Federal Reserve is awakening to the dangers of persistent and gently rising inflation. Wall Street was initially spooked; it had hoped for the usual bounce that follows a Fed rate cut. However, investors subsequently decided the Fed’s inaction meant things…
17Sep2008 | Money Morning | Comments Off | ContinuedFed Policymakers Forced to Balance Weak Growth and High Inflation at Tomorrow’s FOMC Meeting
Already forced to deal with the competing and contradictory challenges of a slowing economy and escalating inflation, U.S. Federal Reserve policymakers will now also have to factor a deteriorating labor market and big drop-off in consumer spending into their interest-rate deliberations when they meet tomorrow (Tuesday).
“There’s a big question mark over the performance of the economy over the next six months,†John Lonski, chief economist at Moody’s Investors Service Inc. (MCO) in New York, told Bloomberg News. “We have to be braced for a decidedly slower pace of consumer spending.â€
Only a month ago, the economic outlook was much more upbeat.
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15Sep2008 | Money Morning | Comments Off | ContinuedFed Signals Next Move Will be a Hike in Rates, But Timing Remains Uncertain
The next move from the U.S. Federal Reserve will be to increase the Federal Funds rate, although the timing of that hike remains to be decided.
“A number of participants worried about the possibility that core inflation might fail to moderate next year unless the stance of monetary policy was tightened sooner than currently anticipated by financial markets,†according to the minutes of the Federal Open Market Committee’s Aug. 5 meeting released yesterday (Tuesday).
The FOMC voted to slash interest rates seven times from 5.25% last September, before voting to hold steady at the current 2.0% rate at the last two…
27Aug2008 | Money Morning | 1 comment | ContinuedFederal Reserve Holds Rates Steady at 2.00%, Says “Downside Risks†and Inflation Remain Concerns
Federal Reserve policymakers yesterday (Tuesday) kept the nation’s benchmark interest rate at 2.00% for the second consecutive meeting, although inflation accelerated and the U.S. economy only advanced slowly.
“Although downside risks to growth remain, the upside risks to inflation are also of significant concern to the committee,” the policymaking Federal Open Market Committee (FOMC) said in a statement.
After a slight contraction in the fourth quarter of 2007, U.S. gross domestic product (GDP) has expanded at a moderate pace, enabling the U.S. economy to dodge an actual recession. GDP increased a 1.9% annual rate in the second quarter after edging up 0.9%…
6Aug2008 | Money Morning | 1 comment | ContinuedDallas Fed President Lends Credibility to Money Morning’s Prediction That the Federal Reserve Will Soon be Boosting Interest Rates
Just one day after Money Morning predicted that the U.S. Federal Reserve would soon be forced to increase interest rates, Dallas Fed President Richard W. Fisher said he expected the central bank would raise interest rates should inflationary pressures start causing severe consumer pain.
“If inflationary developments and, more important, inflation expectations continue to worsen, I would expect a change of course in monetary policy to occur sooner rather than later, even in the face of an anemic” U.S. economy, Fisher said during a Wednesday speech in San Francisco.
In a financial commentary titled, “With Oil Speculators Blitzing, the Fed Needs to Call…
31May2008 | Money Morning | Comments Off | ContinuedWith Oil Speculators Blitzing, the Fed Needs to Call an Interest-Rate Reverse Play
The inflationary reality that we as consumers have been living for months may finally be starting to dawn on the U.S. Federal Reserve.
The minutes of the last policymaking Federal Open Market Committee (FOMC) meeting, released on Wednesday, showed that the Fed’s inflation forecast was raised from a range of 2.1%-2.4% to a range of 3.1%-3.4%.
Add the zooming oil prices we have seen recently into the mix, and the conclusion is inevitable: The nation’s central bank will soon have to reverse course and start raising interest rates – and probably in a hurry, too, if the Fed wants to keep oil prices…
28May2008 | Money Morning | Comments Off | Continued
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