monetary policy

Bernanke Signals Continued Fed Support for Low Interest Rates

The Federal Reserve's low interest-rate policies are giving key support to an economy still burdened by high unemployment, Chairman Ben Bernanke told Congress on Tuesday. Bernanke signaled that the Fed's efforts to keep borrowing costs low -- buying treasuries and mortgage bonds -- will continue.

Fed Open to Linking Rate Hike to Economic Gauge

The Federal Reserve wants to find a clearer way to signal to the public when it might start raising interest rates. The Fed plans to keep short-term rates low for at least another three years, but it appears to be leaning toward setting a more specific target.

Fed Unveils Bold, Open-Ended Steps to Aid Economy

The Federal Reserve says it will spend $40 billion a month to purchase mortgaged-back securities because the economy is too weak to reduce high unemployment. The Fed says it will keep buying the securities until the job market shows substantial improvement.

Fed Notes Better Economy, Takes No Policy Action

The Federal Reserve offered a more positive view of the economy after a burst of hiring since its last meeting. It held off taking further steps to boost the recovery and reiterated its plan to keep short-term interest rates near zero until at least late 2014. The Fed's statement issued after Tuesday's one-day meeting was more upbeat than the one it released in January.

Fed Takes No New Action at Final Meeting of 2011

The Federal Reserve says the economy has grown moderately as hiring and consumer spending have improved. As a result, it's holding off on any new steps to boost the economy. But Fed officials, noting that unemployment remains high and global economic growth has slowed, left open the possibility of taking new steps next year if the economy worsens.

Fed Holds Off On Further Actions To Help Economy

The Federal Reserve is holding off on any new actions to help the economy because stronger growth is giving it time to gauge the impact of steps it's already taken. Fed policymakers made the announcement after a two-day meeting.

Gold-Backed U.S. Currency? Yes, But 'U' Stands for Utah

Earlier this year, the Utah state legislature passed a law making gold and silver coins legal tender. Now, a Salt Lake City-area numismatist hopes to set up a depository system that will allow Utahans to use gold and silver to pay for anything they want.

Why the Dollar Is Stuck at Three-Month Lows

One would think that with the Mideast crisis East, oil prices skyrocketing and U.S. manufacturing rebounding smartly, the buck would be flying high. But no. Why that's so may lie in international perceptions about where interest rates are heading.

Trapped: The Fed Has Painted Itself Into a Corner

Having committed itself to near-zero-percent interest rates and quantitative easing, the Fed is now caught in a double bind: Continue those policies and keep pumping money into speculative, inflation-hiking commodity bets or end them and let rates rise, with the harmful economic impact.

Is Inflation About to Heat Up? Well, It's Complicated

Given an economy gaining steam and a vast expansion in the money supply, it's easy to assume inflation is up next. The causes of inflation, however, are anything but straightforward -- which is something investors need to remember.

'This Recovery Is Really
Taking Hold'

A report from the Philadelphia Fed showed America's manufacturing sector is strongly bouncing back. Not only are firms reporting booming activity, strong shipments of goods and more unfilled orders, but jobs are being created at the highest rate in 38 years.

Can the U.S. Sidestep Growing Global Inflation?

Rising food and energy prices will likely hit America the same way they've hit other countries. Other inflationary forces are more variable from nation to nation. Still, the U.S. can't fully escape rising prices, especially when it comes those common consumer necessities.

The Employment Cost Index Deserves a Closer Look

The employment cost index increased just 2% in 2010, and the trend will likely continue in 2011. Those contained employee costs will help maintain a low-inflation environment that should give the Fed more time to stimulate the economy through its asset-purchase program.

Will the Fed's New Hawks Force a Change of Course?

While most analysts don't expect a major departure from the December Fed meeting, the voting lineup has changed substantially. Now, Chairman Bernanke has to deal with three new members of the rate-setting committee who have expressed reservations about quantitative easing.

Looking for Another Year on Wall Street Like Last Year

After putting up solid double-digit gains this year, the case for the stock market in 2011 is more of the same. And when the Fed finally raises short-term rates, on pro says, the smart traders will be those who jump on the opportunity to do some serious bargain-hunting.

November's Producer Price Rise Aids the Deflation Fight

Led by a jump in energy, producer prices rose 0.8% in November -- a gain that suggests policymakers may be winning their battle to avoid deflation. It's the straight monthly rise. However, minus energy and food increases, inflation pretty much vanishes.

Will the Tax Deal Give the Fed a Helping Hand?

The Federal Reserve is widely expected to make no changes to interest rates or its bond-buying program. One reason the Fed may not have to act is that President Obama's tax deal will provide the economy with a boost the Fed couldn't have envisioned before.

Seven Ways Ron Paul Is Wrong About the Fed

Republican Ron Paul is going to have a great time making the Federal Reserve miserable once he takes over as chair of the House subcommittee that overseas it. But he's off-target in at least seven points of criticism he levels at Bernanke & Co.

Greenspan: Rising Stock Markets Are Key to Recovery

The former Fed chief told CNBC Friday that the Fed's policy to boost liquidity is helping stock values. "I think we are underestimating. . .how important asset prices, very specifically equity prices, are not only to shareholders but the economy as a whole," he said.

What Happened to the 'Plan' to Devalue the Dollar?

No matter what the Fed chairman actually intended, the central bank's latest push to inject money into the economy isn't resulting in a cheaper dollar. And it's not just Europe's woes that are conspiring against the buck -- a slew of other factors are also at play.

Record Wholesale Turkey Prices May Just Be the Beginning

Wholesale turkey prices are currently hovering around $1.09 per pound, the highest they've ever reached. Several factors are behind the record, but perhaps the biggest one comes from Washington, in the form of Federal Reserve monetary policy.

October's 0.4% PPI Increase: Enough for the Fed?

Producer prices rose less than expected, with much of the increase coming from energy prices. Excluding food and energy, the PPI fell 0.6% in the month. Overall, wholesale prices are up just 1.5% in the past year -- still too close to deflation for the U.S. Federal Reserve.

Republican Economists Take On Ben Bernanke and QE2

A group of Republican economists aren't keen on the Fed's decision to buy $600 billion in bonds in an effort to spur the U.S. economy. They charge that the aggressive strategy -- championed by Fed Chairman Ben Bernanke -- could trigger inflation and weaken the dollar.

Goldman Sachs Defends Bernanke's Plan to Buy Assets

Goldman Sachs (GS) economists defended Federal Reserve Chairman Ben Bernanke%u2019s decision to pump billions of dollars into the economy, saying the move will boost economic growth. The Fed%u2019s plan to buy $600 billion of assets will improve growth and reduce the risk of deflation, economist Jan Hatzius wrote in an e-mail to clients, Bloomberg News said.

The Fed Tries Again to Buy Economic Growth

U.S. Federal Reserve today launched the second phase of its quantitative easing program, the so-called QE2, saying it will buy up to $600 billion more in long-term U.S. Treasury bonds to help stimulate a U.S. economy that's growing too slowly.