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.
China reported much higher-than-expected inflation in October as a jump in food costs drove its CPI to a 25-month high. The government will surely try again to further slow economic growth and reach its economic targets.
After initially voting for the QE2 plan, Federal Reserve Governor Kevin Warsh said in a speech Monday that the government's decision to buy $600 million worth of bonds to spur the economy is a bad idea.
Some experts say a power split in Washington is just what investors need. Others argue that the results of the past 61 years don't bear that out. Maybe, it's really the Fed's monetary policy that really dictates which direction stocks go.
U.S. Federal Reserve 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.
Just about everyone expects the Federal Reserve to announce a bond-buying program with the goal of stimulating the economy. But not many observers think it's a good idea -- and the chorus of critics is only getting louder.
Former Fed Chairman Paul Volcker warns that more quantitative easing by the Federal Reserve will stoke inflation. "When money is too easy for too long, we will have more" asset bubbles, the 83-year-old Volcker said.
Consumer outlays increased at the best pace in about four years -- providing some hope that the expansion can continue. The rise from the second-quarter rate of 1.7% was in line with economists' expectations. Soaring imports were a big drag on the growth report.
The noted economist writes in a Financial Times editorial that Obama did plenty to stave off a depression. But his administration is already too timid about further stimulus, and once the GOP gains power in Congress, the policy prescriptions will become even more feeble.
The current flatness in prices isn't what the Federal Reserve wants. It would much rather see a little more inflation in the economy. Says Great Depression scholar Ben Bernanke: "Further disinflation would be unwelcome." The Fed has work to do on that score.
Kansas City Federal Reserve President Thomas Hoenig broke ranks with some of his fellow regional Federal Reserve executives Tuesday, warning against further monetary action as a way to spur economic activity.
Federal Reserve Bank of Chicago President Charles Evans proposed further monetary action on the part of the Federal Reserve, including purchasing more Treasury bonds to cut the cost of borrowing, while lowering his forecast for U.S. economic growth, the Wall Street Journal reported. Meanwhile, Nobel Prize winning economist Joseph Stiglitz warned against such a policy, saying that monetary action would wreak havoc on the foreign-exchange markets, according to Reuters.
With elections near and joblessness still so high, Congress and even the Fed are chasing short-term solutions that won't really help matters. More finely targeted policies would be effective, but don't expect any until, with luck, after Nov. 2.
Further monetary action by the Fed may be warranted because of high unemployment rates and low inflation, said Federal Reserve Bank of New York President William Dudley during a speech Friday at the Society of American Business Editors and Writers conference in New York.
The Swiss franc has been a top currency over the past six months, outpacing the dollar by 8.9% and the euro by 7.8%, thanks to shaky conditions in Europe. But some signs suggest the Swiss currency is due for a correction.
Most policymakers cling to orthodox levers in an effort to boost employment, but another stream of thought is picking up momentum behind the scenes. It seems the jobs are available, but workers with the right skills aren't. Therefore, why not push retraining as a remedy?
Stocks closed mixed with little change on Tuesday after the Federal Reserve stood pat on interest rates and warned that falling prices are becoming a bigger concern. Tuesday's meeting did little to give equities direction after an initial mid-afternoon pop.
The Fed is keeping its existing easy monetary policy unchanged. But, it's prepared to take additional action, if necessary, to stimulate the economy and combat falling prices.
August's as-expected 0.3% consumer price index rise shows the U.S. economy is experiencing disinflation, or lower inflation, but not outright deflation. Still, current levels are about as low as the Fed wants inflation to be.
In a new survey, economists say the U.S. government should focus on promoting economic growth rather than reducing the deficit in the near term. However, 75% of them oppose another stimulus package.
The producer price index rose less than expected in July, but with the core level rising a higher-than-expected 0.3%. Low inflation -- not delfation -- is probably just what the U.S. Federal Reserve wants at this stage of the recovery.
Stocks were surprisingly resilient after the lousy July jobs report was released on Friday. Now, with the report behind us and earnings season just about over, what will drive the market in the week ahead?
In a paper titled "Seven Faces of the Peril," St. Louis Fed chief James Bullard lays out two possible paths for the U.S. economy. One is that the country falls into a Japanese-style, years-long rut of deflation.
Federal Reserve board nominees Janet Yellen, Peter Diamond and Sarah Bloom Raskin received a thumbs up from the Senate Banking Committee Wednesday, putting full Senate approval one step closer. A final vote is expected in September.
In his latest Capitol Hill testimony, the Fed chairman said the U.S. economic outlook is "unusually uncertain," and he was fairly opaque about his plans. But that doesn't mean he won't act. Here's a look at some likely options.
