monetary policy

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.

Fed Will Create More Money, but Will It Help?

Just about everyone expects the Federal Reserve to announce a new program of buying bonds 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.

Third-Quarter GDP Rose to 2% on Consumer Spending

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.

Post-Elections, Roubini Sees a 'Fiscal Train Wreck'

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.

September's 0.1% CPI Has the Fed on Deflation Alert

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.

Dollar Falls to 15-Year Low Against Yen

The dollar fell to a 15-year low against the yen and the weakest since January against the euro on speculation that the Federal Reserve will ease monetary policy. The dollar slipped 0.8% to 81.13 yen at 6:37am in New York, from 81.81 yen on Wednesday. Earlier, it fell to 80.89 yen, the weakest since 1995. The dollar fell to as low as $1.4122 against the euro, the weakest since Jan. 26.

Fed's Hoenig Warns Against Further Monetary Action

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.

Bank of England Leaves Interest Rates, Asset Buying Unchanged

The Bank of England left interest rates at 0.5% for the 20th month in a row and maintained its asset-buying program unchanged, Reuters reported. The interest rate decision was widely expected by economists. Still, mixed economic data and a divided policy-making board mean that the future is uncertain for the asset-buying program.

Chicago Fed's Evans Pitches Monetary Action While Economist Stiglitz Warns Against It

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.

There Are No Quick Fixes
for the U.S. Economy

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 targets policies would be effective, but don't expect any until, with luck, after Nov. 2.

Fed's Dudley Hints at Further Action to Ease Money Supply

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.

Safe Haven No More: Swiss Franc Headed for Trouble

The Swiss franc has been the second-best performing major currency over the past six months, outpacing the dollar by 8.9% and the euro by 7.8%, thanks to shaky conditions elsewhere in Europe. But a broad range of signs suggest the Swiss currency is due for at least a short-term correction.

Retraining May Be the Best Cure for Unemployment

Most policymakers cling to orthodox levers in an effort to boost employment, but another stream of thought seems to be picking up momentum behind the scenes. It seems the jobs are available but workers with the right skills aren't. Therefore, push retraining as a remedy.

The Fed Doesn't Give Equities Much Movement

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.