Posts Tagged ‘ Federal Reserve ’

Should the Fed give workers a raise? No

November 7, 2016
posted by

Scott Sumner EconLog
by Scott Sumner  

"Some people are saying the Fed should give the economy 'more room to run.' They shouldn't be a bunch of meanies who are tightening policy just when workers are finally getting a raise. I certainly don't want the Fed to be a meanie, but the 2.8% nominal wage growth is actually the strongest argument for a rate increase -- even stronger than the low unemployment." (11/06/16)

http://econlog.econlib.org/archives/2016/11/should_the_fed_2.html  

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Are Keynesians trying to bring back the Real Bills Doctrine?

November 3, 2016
posted by

Scott Sumner EconLog
by Scott Sumner  

"The idea to fund productive investments with new money is called the 'Real Bills Doctrine.' This was a popular idea in the early part of the Fed's existence, and may have contributed to the Great Depression. The basic problem with the Real Bills Doctrine is that it leads to procyclical monetary policy. If monetary policy becomes more expansionary when investment is increasing, then it will tend to be more expansionary in booms than in depressions. In fact, monetary policy should be countercyclical -- trying to smooth out the path of NGDP over time." (11/02/16)

http://econlog.econlib.org/archives/2016/11/are_keynesians.html  

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The left’s Fed Up makes a naked power grab for control of the Fed

October 27, 2016
posted by

The Cobden Centre
by Ralph Benko  

"The left is undertaking an amazing back door plan to dramatically increase its influence over the Fed's interest-rate-setting Open Market Committee. The key activist group, a division of the Center for Popular Democracy, is working to kick the bankers off the boards of directors of the district Federal Reserve banks. Those boards choose the presidents who serve, in rotation, as voting members on the FOMC. Brilliant. In scope, the left's plan makes trivial by comparison Auric Goldfinger's 'Operation Grand Slam' to contaminate America's gold holdings at the US Treasury Depository at Fort Knox. Goldfinger planned to turn them radioactive. Those holdings amounted, in 1964, to about $14 billion. They are now valued at close to $200 billion. Either way, a tidy sum. Yet it's just a nickel compared to the Fed's more than $4 trillion holdings." (10/27/16)

http://www.cobdencentre.org/2016/10/the-lefts-fed-up-makes-a-naked-power-grab-for-control-of-the-fed/  

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Is the Fed a firefighter or an arsonist?

October 21, 2016
posted by

Scott Sumner EconLog
by Scott Sumner  

"Some people question whether the Fed really 'did anything' to create the Great Moderation. It depends what you mean by 'did anything.' Most economists don't know how to identify monetary policy changes, and hence in their empirical work they struggle to find evidence of the Fed having much effect on the economy. If they defined monetary policy in terms of expected changes in NGDP, then the role of the Fed would be much clearer. If at the same time the government created a deep and highly active NGDP futures market, then monetary shocks would be even easier to identify. But you go to war with the generals you have, not the generals you wished you had. And we don't have a highly active NGDP futures market." (10/20/16)

http://econlog.econlib.org/archives/2016/10/is_the_fed_a_fi.html  

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The Federal Reserve is Hillary Clinton’s secret weapon

October 20, 2016
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Tommy Behnke  

"Say what you want about Donald J. Trump, but he is correct about one thing: the Federal Reserve has, with near certainty, been holding interest rates down for political purposes -- namely, to aid Hillary Clinton in getting elected president of the United States. ... The Federal Open Market Committee's (FOMC) September meeting minutes, released on Wednesday, have proven Mr. Trump's assertion to be true. As the 2016 election season draws to a close, the Fed has suddenly become more bullish on the prospect of raising interest rates -- and this precipitous change-of-heart has come despite there being few notable signs of hope in the US's economic data." (10/20/16)

https://mises.org/blog/federal-reserve-hillary-clinton%E2%80%99s-secret-weapon  

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Fed Beige Book shows “mostly positive” outlook for US economy

October 19, 2016
posted by

Bloomberg    

"The U.S. economy maintained a steady growth pace between late August and early October, as a tight labor market with nascent wage pressures contributed to a 'mostly positive' outlook, a report from the 12 Federal Reserve districts showed. 'Most districts indicated a modest or moderate pace of expansion,' according to the Fed's latest Beige Book, an economic survey by reserve banks. 'Outlooks were mostly positive, with growth expected to continue at a slight to moderate pace in several districts.' The job market 'remained tight' with modest employment and wage growth, according to the report released Wednesday in Washington." (10/19/16)

http://www.bloomberg.com/news/articles/2016-10-19/fed-beige-book-shows-mostly-positive-outlook-for-u-s-economy  

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Fed bars HSBC exec after fraud indictment

October 6, 2016
posted by

Bloomberg    

"An HSBC Holdings Plc. executive and a former employee have been barred from the banking industry by the Federal Reserve as they face U.S. criminal charges that they committed fraud in conducting foreign-exchange trades. The Fed's move follows the August indictments of Mark Johnson, who was HSBC's head of foreign exchange cash trading, and Stuart Scott, the bank's former head of currency trading in Europe. The men, both British citizens, are accused of using insider knowledge to front-run a $3.5 billion currency deal in 2011 that made the bank $8 million in profits." (10/06/16)

http://www.bloomberg.com/news/articles/2016-10-06/hsbc-executive-barred-by-fed-after-indictment-over-forex-fraud  

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The Fed’s surrealistic “melting clocks” monetary policy is the American dream killer

September 15, 2016
posted by

The Cobden Centre
by Ralph Benko  

"The most recent government measure shows that America's economic growth rate slowed, in the last quarter, to a rate of only 1.1 percent, about one-third of normal American economic growth rates. This may not sound like a big deal. But it is. It means that job creation, including our ability to get better jobs, raises, bonuses and promotions, has vanished. It means the death of the American Dream." (09/15/16)

http://www.cobdencentre.org/2016/09/the-feds-surrealistic-melting-clocks-monetary-policy-is-the-american-dream-killer/  

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The Fed plans for the next crisis

September 13, 2016
posted by

Ron Paul Campaign For Liberty
by Ron Paul  

"Much more significant than Yellen's latest suggestion of a rate increase was her call for the Fed to think outside the box in developing responses to the next financial crisis. One of the outside the box ideas suggested by Yellen is increasing the Fed's ability to intervene in markets by purchasing assets of private companies. Yellen also mentioned that the Fed could modify its inflation target. Increasing the Federal Reserve's ability to purchase private assets will negatively impact economic growth and consumers' well-being. This is because the Fed will use this power to keep failing companies alive, thus preventing the companies' assets from being used to produce a good or service more highly valued by consumers." (09/12/16)

http://www.campaignforliberty.org/fed-plans-next-crisis  

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Mission creep — how the Fed will justify maintaining its excessive balance sheet

September 1, 2016
posted by

The Cobden Centre
by Eugen von Bohm-Bawerk  

"FOMC have changed their normalizing strategy several times and we now see the contours of yet another shift. The Federal Reserve was supposed to reduce its elevated balance sheet before moving interest higher as it would be impossible to increase the fed funds rate in the old fashioned way when the market was saturated with trillions of dollars in excess reserves. When it finally dawned on the FOMC that selling large quantities of TSY and MBS into the market was probably not a very bright idea, they created the O/N RRP to be able to raise rates without draining the financial system of reserves beforehand. Still, the thought of selling, or more accurately not rolling over, trillions worth of government debt, when SWF's and foreign FX managers are desperate to raise USD is still not something the FOMC even want to contemplate." (09/01/16)

http://www.cobdencentre.org/2016/09/mission-creep-how-the-fed-will-justify-maintaining-its-excessive-balance-sheet/  

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Fed minutes show rate hike could come “soon”

August 17, 2016
posted by

USA Today USA Today    

"The Fed's minutes from its July 26-27 meeting revealed a subtle shift in the central bank's stance indicating a hike in short-term interest rates is increasingly likely. 'They (members of Federal Open Market Committee) judged that another increase in the federal funds rate was or would soon be warranted,' according to the notes. If the Fed were to make a move in its upcoming September meeting, that would be its first hike to short-term interest rates this year. Stocks were stable on the news as investors focused on the Fed's increased faith in the strength of the economy, but also the fact that the Fed still seems torn on taking an interest rate move. The Dow Jones industrial average was down 4.89 to 18547, which was an improvement from earlier in the day." (08/17/16)

http://www.usatoday.com/story/money/markets/2016/08/17/fed-minutes-show-rate-hike-could-come-soon/88895726  

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Will the bubble pop even if the Fed never raises rates?

August 8, 2016
posted by

Ludwig von Mises Institute
by Brendan Brown  

"There is no ready-made answer in Austrian business cycle theory (ABCT) to the multi-trillion dollar question now looming over the global economy and markets. Is the present virulent asset price inflation disease likely to enter any time soon its final phase of bust and recession? Will this happen even though the Federal Reserve has flip-flopped on even token steps toward policy normalization and leading foreign central banks (i.e., the Bank of Japan, ECB, and Bank of England) to pursue experiments with negative interest rates and novel forms of mega-balance sheet expansion?" (08/08/16)

https://mises.org/blog/will-bubble-pop-even-if-fed-never-raises-rates  

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Fed demands $36 million bribe from Goldman for profiting off confidential information

August 3, 2016
posted by

CNBC    

"Goldman Sachs has been ordered to pay a $36.3 million penalty relating to a case in which a former employee allegedly used confidential regulatory information to win clients. In an order issued Wednesday, the U.S. Federal Reserve ordered the bank to pay the fine in regard to a case involving Joseph Jiampietro, an investment banker who regulators say used a Fed contact later hired by Goldman to obtain the information." (08/03/16)

http://www.cnbc.com/2016/08/03/fed-fines-goldman-sachs-for-profiting-off-confidential-information.html  

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Fed leaves rates unchanged, says risks to outlook reduced

July 28, 2016
posted by

Reuters Reuters    

"The Federal Reserve left interest rates unchanged on Wednesday but said near-term risks to the U.S. economic outlook had diminished, opening the door to a resumption of monetary policy tightening this year. The U.S. central bank said the economy had expanded at a moderate rate and job gains were strong in June. It added that household spending also had been 'growing strongly,' and pointed to an increase in labor utilization. While Fed policymakers said they continued to closely monitor inflation data and global economic and financial developments, they indicated less worry about possible shocks that could push the economy off course." (07/27/16)

http://www.reuters.com/article/us-usa-fed-idUSKCN1072DM  

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The Fed’s psyche

July 24, 2016
posted by

Scott Sumner EconLog
by Scott Sumner  

"I've seen a number of other people also refer to the Fed's fear of another 1994, when there was a bond market 'bloodbath.' This got me thinking about the Fed's delicate 'psyche,' which is so susceptible to indelible marks. What horrors occurred in 1994, as a result of the bond bloodbath? And where would I look for the evidence? The obvious place to look is in the inflation and unemployment data, which are the two variables that the Fed is instructed to stabilize. Presumably something really, really bad happened to the economy in 1994, and left an indelible market on the Fed. So let's take a look at the inflation and unemployment data, before and after January 1994 ..." (07/23/16)

http://econlog.econlib.org/archives/2016/07/the_feds_psyche.html  

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Four ways states can take on the Federal Reserve

July 17, 2016
posted by

10th Amendment Center Tenth Amendment Center
by Jp Cortez  

"While the debasement of the currency is the result of federal policy and banker collusion, the effect is broad and deep. While there has been talk about reform, or at least an audit of the Fed, it is virtually a certainty that the federal government will never relinquish the power it enjoys through control of the monetary system. That said, there are practical steps that can be taken at the state level to promote the use and acceptance of sound money and undermine the Fed's monopoly on money." (07/16/16)

http://tenthamendmentcenter.com/2016/07/16/four-ways-states-can-take-on-the-federal-reserve/  

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Fed minutes suggest rate hikes on hold until Brexit impact clearer

July 6, 2016
posted by

Reuters Reuters    

"Federal Reserve policymakers decided in June that interest rate hikes should stay on hold until they have a handle on the consequences of Britain's vote on EU membership, according to the minutes of the Fed's June policy meeting released on Wednesday. ... The Brexit vote shocked investors and triggered $2 trillion in losses in global stock markets the day after the referendum. Anxieties remain, with global financial conditions tightening as investors anticipate it could take years before Britain and the EU agree to new rules on finance, trade and immigration. On Wednesday, U.S. benchmark and long-dated Treasury yields hit record lows, with some investors betting the Fed would keep rates on hold through 2017." (07/06/16)

http://www.reuters.com/article/us-usa-fed-idUSKCN0ZM23F  

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The Tom Woods Show, episode 686

June 23, 2016
posted by

The Tom Woods Show The Tom Woods Show
by  

"John Tamny and I discuss the Fed and its record, along with money, credit, and the economy in general. We also get into a dispute over fractional-reserve banking. Check it out!" [various formats] (06/22/16)

http://tomwoods.com/podcast/ep-686-we-dont-need-the-fed-a-central-planning-agency/  

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Seeds of Liberty Podcast, episode 59: Harriet Tubman irony on Federal Reserve Note trash

May 2, 2016
posted by

Peaceful Anarchism Peaceful Anarchism
by  

"Please enjoy this recent episode of the Seeds of Liberty Podcast. This week we had Merrick and Jonathan, from the RadicaLogic Podcast sitting in for Dave. Herein we discussed the distraction of Harriet Tubman on the $20, the constant devaluation of currency, the Colorado town where the police force quit, Fisher Pricing your message, being neutered by the State, the Cell 411 app, Canadian police protecting and serving the shit out of a friend of the show, dealing with home invaders, the fake war on cops, and more!" [MP3] (05/01/16)

http://peacefulanarchism.com/seeds-of-liberty-podcast-episode-59-harriet-tubman-irony-on-federal-reserve-note-trash/  

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With fiat money, everything is relative

April 28, 2016
posted by

Frank Shostak Ludwig von Mises
by Frank Shostak  

"An important factor in setting the purchasing power of money is the supply of money. If over time the rate of growth in the US money supply exceeds the rate of growth of the European money supply, all other things being equal, this will put pressure on the US dollar. Since a price of a good is the amount of money per good, this now means that the prices of goods in dollar terms will increase faster than prices in euro terms, all other things being equal." (04/28/16)

https://mises.org/blog/fiat-money-everything-relative  

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Monetary policies misunderstood

April 28, 2016
posted by

Steve H. Hanke Cato Institute
by Steve H Hanke  

"Ever since the U.S. Federal Reserve (Fed) began to consider raising the federal funds rate, which it eventually did in December 2015, a cottage industry has grown up around taper talk. Will the Fed raise rates, or won't it? Each time a consensus congeals around the answer to that question, all the world's markets either soar or dive. This obsession with taper talk -- the interest rate story -- is simple, but strange. Indeed, it is misguided -- wrongheaded. So, why the obsession? It is, in part, the result of a Keynesian hangover." (for publication 05/16)

http://www.cato.org/publications/commentary/monetary-policies-misunderstood  

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Tubman versus Jackson on the $20 bill

April 25, 2016
posted by

Jacob G Hornberger Future of Freedom Foundation
by Jacob G Hornberger  

"Amidst the tempest produced among politicians and the mainstream press over the Obama administration's decision to replace Andrew Jackson with Harriet Tubman on the $20 bill, no one bothers to ask some very simple questions: Why does the $20 bill say: 'Federal Reserve Note' on it? Doesn't the term 'note' connote a promissory note, which entails a promise to pay something? What exactly is the $20 'Federal Reserve Note' promising to pay? How and when is the promise fulfilled? When does the note come due? Can holders of the $20 bill demand to be paid now? If not, when? The answers to those questions are rooted in the monetary system that was originally established for the United States under the U.S. Constitution and in the abandonment of that system during the Franklin Roosevelt administration." (04/25/16)

http://fff.org/2016/04/25/tubman-versus-jackson-20-bill/  

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Dishonoring Harriet Tubman

April 21, 2016
posted by

Thomas L. Knapp William Lloyd Garrison Center for Libertarian Advocacy Journalism
by Thomas L Knapp  

"Due to a cumulative inflation rate of more than 2,300% since 1913, a $20 bill today will buy goods valued at 83 cents in 1913 currency. That differential represents something that Tubman spent her whole life fighting. I wonder how one of slavery's greatest opponents would feel about having her image appropriated for use on the symbol of its resurgence -- an instrument of debt representing the promises of politicians to hold their subjects in perpetual bondage while taking the payments out of our hides?" (04/21/16)

http://thegarrisoncenter.org/archives/5668  

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Historic makeover: Harriet Tubman to be face on US $20 bill

April 21, 2016
posted by

Bloomington Pantagraph    

"Harriet Tubman, an African-American abolitionist born into slavery, will be the new face on the $20 bill. The leader of the Underground Railroad is replacing the portrait of Andrew Jackson, the nation's seventh president and a slave owner, who is being pushed to the back of the bill. And Alexander Hamilton, the nation's first Treasury secretary who's enjoying a revival thanks to a hit Broadway play, will keep his spot on the $10 note after earlier talk of his removal. The changes are part of a currency redesign announced Wednesday by Treasury Secretary Jacob Lew, with the new $20 marking two historic milestones: Tubman will become the first African-American on U.S. paper money and the first woman to be depicted on currency in 100 years." (04/21/16)

http://www.pantagraph.com/business/historic-makeover-harriet-tubman-to-be-face-on-bill/article_f3c7dfe3-793a-517a-8e38-2146aaf2246a.html  

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A modest proposal to end Fed independence

April 20, 2016
posted by

Joseph T. Salerno Ludwig von Mises Institute
by Joseph T Salerno  

"In the decade leading up to the financial crisis, the intellectual climate was such that anyone suggesting that the Fed have its independence curtailed or even abrogated by Congress would have been considered beyond the pale of rational, let alone scholarly, discussion. However, as the painful and protracted recovery from the Great Recession has dragged on, the Fed's independence of 'politics,' i.e., of legislative oversight and constraint, has begun to be challenged even by economists and financial pundits." (04/19/16)

https://mises.org/library/modest-proposal-end-fed-independence  

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