Posts Tagged ‘ Federal Reserve ’

It takes a regime change

February 11, 2016
posted by

Scott Sumner EconLog
by Scott Sumner  

"In the 1970s, the Fed kept tinkering with interest rates, not understanding that high rates don't mean tight money. Inflation and NGDP growth kept soaring higher and higher. Eventually economists came to believe that (old) Keynesian economics was bankrupt. A new regime requires new leadership, not invested in the failed policy. President Carter 'promoted' Fed chair G. William Miller (actually he was basically fired), and replaced him with Paul Volcker, who abandoned the interest rate targeting regime. Inflation was brought under control. It may be too soon for this sort of personnel change today, but it's certainly not too soon to conclude that the current interest rate targeting regime has failed." (02/11/16)

http://econlog.econlib.org/archives/2016/02/it_takes_a_regi.html  

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No, Senator Sanders, the Fed was ALWAYS a creature of cronyism

February 4, 2016
posted by

Independent Institute Independent Institute
by David Flemming  

"In his letter to the New York Times on Dec. 23, Sanders claims that the Federal Reserve is 'an institution that was created to serve all Americans (which) has been hijacked by the very bankers it regulates.' 'Hijacked' is misleading terminology. The Fed was created on behalf of bankers seeking government favors. Sanders unwittingly propagates the myth that it was created to 'serve all Americans.'" (02/04/16)

http://blog.independent.org/2016/02/04/no-senator-sanders-the-fed-was-always-a-creature-of-cronyism/  

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The cozy relationship between the Treasury and the Fed

February 4, 2016
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by David Howden  

"Last year was a tough one for investors. Gold was down 10 percent. The Dow Industrials fell 2.5 percent, and most bond indexes finished down by at least that much. One institution that performed remarkably well in 2015 was the Federal Reserve. It just finished its most profitable year on record." (02/04/16)

https://mises.org/library/cozy-relationship-between-treasury-and-fed  

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Federal Reserve: Bizarro Robin Hood?

January 21, 2016
posted by

Campaign For Liberty Campaign For Liberty
by Norm Singleton  

"Bizzaro World is a land featured in the Superman comics where everything is the opposite of our world. While Bizzaro World is a fictional creation, at times it seems that some individuals and institutions from Bizarro World have stepped off the pages of the comics and into real life. Take the Federal Reserve for example. Michael Gray of the New York Post is the latest to point out that the Federal Reserve is a Bizzaro Robin Hood, since it steals from the poor and gives to the rich ..." (01/21/16)

http://www.campaignforliberty.org/federal-reserve-bizzaro-robin-hood  

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What does the Federal Reserve have to hide?

January 13, 2016
posted by

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

"Supporters paint a Fed audit as simple common sense; opponents as an attempt to 'politicize' US monetary policy. It seems to me that logic and reason are entirely with the pro-audit side. The Federal Reserve system was established by Congress in 1913 for the express purpose of manipulating the national currency pursuant to statutory objectives (creating and maintaining 'maximum employment, stable prices, and moderate long-term interest rates'). That's inherently 'political.' It's not 'politicization' that audit opponents really object to. What they object to, their dark references to 'conspiracy theory' and other attempts at distraction notwithstanding, is transparency." (01/12/15)

http://thegarrisoncenter.org/archives/4051  

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US Senate rejects “Audit the Fed” bill

January 13, 2016
posted by

The Washington Post Washington Post    

"The Senate on Tuesday blocked legislation calling for tougher audits of the Federal Reserve, rebuffing an attempt by Republican presidential candidate Rand Paul to give lawmakers greater oversight of the central bank’s moves on interest rates. The 53-44 vote fell short of the threshold to overcome a Democratic filibuster. But the Kentucky Republican, who is seeking the GOP's nomination for president, was joined by independent Sen. Bernie Sanders of Vermont, a candidate for the Democratic nomination for president who occupies the opposite end of the political spectrum from Paul." (01/13/16)

https://www.washingtonpost.com/politics/federal_government/senate-rejects-rand-pauls-audit-the-fed-legislation/2016/01/12/f3a21abe-b968-11e5-85cd-5ad59bc19432_story.html  

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Are we headed for another bust?

January 5, 2016
posted by

Frank Shostak Ludwig von Mises Institute
by Frank Shostak  

"On Wednesday December 16, 2015, Federal Reserve Bank policymakers raised the federal funds rate target by 0.25 percent to 0.5 percent for the first time since December 2008. There is the possibility that the target could be lifted gradually to 1.25 percent by December next year. Fed policymakers have justified this increase with the view that the economy is strong enough and can stand on its own feet. 'The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident the inflation will rise over the medium term to its 2 percent objective,' the Fed said in its policy statement. Various key economic indicators such as industrial production don't support this optimism." (01/05/16)

https://mises.org/library/are-we-headed-another-bust  

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Janet Yellen fights the tide of falling interest

January 4, 2016
posted by

Cobden Centre
by Keith Weiner  

"On Wednesday Dec 16, Federal Reserve Chair Janet Yellen announced that the Fed was raising the federal funds rate by 25 basis points. Let's get one thing out of the way. This is not a move towards free markets. Whether the Fed sets interest lower, or whether it sets interest higher, we still have central planning. We still have price fixing of interest rates.
Interest rates may be set too low. However, forcing interest up is no cure. We need to eliminate central planning, and move to a free market in interest. This is impossible in our present monetary regime." (01/04/16)

http://www.cobdencentre.org/2016/01/janet-yellen-fights-the-tide-of-falling-interest/  

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A free market in interest rates

December 23, 2015
posted by

The Cobden Center
by Keith Weiner  

"UUnless you're living under a rock, you know that we have an administered interest rate. This means that the bureaucrats at the Federal Reserve decide what's good for the little people. Then they impose it on us. In trying to return to freedom, many people wonder why couldn't we let the market set the interest rate. After all, we don't have a Corn Control Agency or a Lumber Board (pun intended). So why do we have a Federal Open Market Committee? It's a very good question." (12/22/15)

http://www.cobdencentre.org/2015/12/a-free-market-in-interest-rates/  

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Do we need the Fed?

December 21, 2015
posted by

Ron Paul Campaign For Liberty
by Norm Singleton  

"When the Fed floods the market with artificially created money, it lowers the interest rates, which are the price of money. As the price of money, interest rates send signals to businesses and investors regarding the wisdom of making certain types of investments. When the rates are artificially lowered by the Fed instead of naturally lowered by the market, businesses and investors receive distorted signals. The result is over-investment in certain sectors of the economy, such as housing. This creates the temporary illusion of prosperity." (12/21/15)

http://www.campaignforliberty.org/ron-paul-need-fed  

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Federal Reserve raises key interest rate, ending seven years of near-zero rates

December 17, 2015
posted by

Minneapolis Star Tribune    

"The Federal Reserve is raising interest rates from record lows set at the depths of the 2008 financial crisis, a shift that heralds modestly higher rates on some loans. The Fed coupled its first rate hike in nine years with a signal that further increases will likely be made slowly as the economy strengthens further and inflation rises from undesirably low levels. Wednesday's action signaled the central bank's belief that the economy has finally regained enough strength 6 1/2 years after the Great Recession ended to withstand modestly higher borrowing rates." (12/16/15)

http://www.startribune.com/fed-finally-lifts-key-interest-rate-from-near-zero/362666011/  

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Banking on aggression

December 16, 2015
posted by

Mary Ruwart Ruwart.com
by Mary J Ruwart  

"The Federal Reserve is probably the most powerful cartel in the world. Most people think it is a government agency; in fact, it is an organization of private bankers. The US government has given it a monopoly on US currency, which it can inflate or deflate at will. Virtually overnight, the Fed, as it's often called, can destroy the US economy, creating boom and bust cycles. As goes the United States, goes the world." (12/14/15)

http://www.ruwart.com/blog/banking-on-aggression-from-the-cliff-notes-version-of-healing-our-world.html  

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The problem with the Fed’s economic stimulus

December 2, 2015
posted by

Reformed Libertarian
by C Jay Engel  

"The United States' central bank, The Federal Reserve (or 'Fed' for short), has, for the past 8 years, attempted to reinvigorate the US economy by undertaking various efforts to suppress interest rates below their natural and market levels. Interest rates literally represent the cost of borrowing money and, like all other prices such as those for shoes and beef and toothpaste, can and should be set via the free exchange of millions of people throughout the economy on the free market. This is the fundamental economic principle of Supply and Demand: that prices move up and down due to variations in the relationship between these two components of exchange. No government body via intervention into the market can eradicate the law of supply and demand; just like government intervention against the supply and demand relationship would cause problems in the shoe or beef markets, so it causes problems in the interest rate markets." (12/01/15)

http://reformedlibertarian.com/blog/the-problem-with-the-feds-economic-stimulus/  

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The problem with “rules-based” monetary policy

November 30, 2015
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Tommy Behnke  

"The Taylor Rule is no more accurate at determining interest rates than meteorologists are at forecasting the weather. The only difference between the two is that weathermen are precise on occasion, whereas the federal funds rate under the Taylor Rule is, at best, less wrong. Setting the price of money and credit in the name of unleashing the economy's supposed potential output is the equivalent of enacting price controls on milk to unlock its full buying power. It's a fallacy that cannot be achieved." (11/30/15)

http://mises.org/library/problem-rules-based-monetary-policy  

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The Fed is above the law

November 24, 2015
posted by

Scott Sumner EconLog
by Scott Sumner  

"This post may upset some people, but I am simply trying to describe the world as it is, not as I would wish it to be. I recently spoke with Ryan Hart, who is researching the legal status of Fed policy. That got me thinking about the Fed's mandate, and whether it is legally enforceable." (11/24/15)

http://econlog.econlib.org/archives/2015/11/the_fed_is_abov.html  

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Is the Fed due for downsizing?

November 23, 2015
posted by

Anthony Wile The Daily Bell
by Anthony Wile  

"Politico tells us that the 'Fed pushes back as Congress eyes its billions' and that 'Congress is aiming to take billions out of the Fed's accounts to help pay for a new highway and transit bill.' Beyond explaining the intentions of Congress in this regard, the article speculates on why the Fed hasn't been more vocal about Congress's intended raid on its coffers." (11/21/15)

http://www.thedailybell.com/editorials/36652/Anthony-Wile-Is-the-Fed-Due-for-Downsizing/  

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Does the bell toll for the Fed?

November 10, 2015
posted by

Ron Paul Campaign For Liberty
by Ron Paul  

"Last week Federal Reserve Chair Janet Yellen hinted that the Federal Reserve Board will increase interest rates at the board's December meeting. The positive jobs report that was released following Yellen's remarks caused many observers to say that the Federal Reserve's first interest rate increase in almost a decade is practically inevitable. However, there are several reasons to doubt that the Fed will increase rates anytime in the near future." (11/09/15)

http://www.campaignforliberty.org/ron-paul-bell-toll-fed  

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The Fed desperately tries to maintain the status quo

November 5, 2015
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Ronald-Peter Stoferle  

"During the press conferences of recent FOMC meetings, millions of well-educated investment professionals have been sitting in front of their screens, chewing their fingernails, listening as if spellbound to what Janet Yellen has to tell them. Will she finally raise the federal funds rate that has been zero bound for over six years?" (11/04/15)

https://mises.org/library/fed-desperately-tries-maintain-status-quo  

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The Fed can’t raise rates, but must pretend it will

November 2, 2015
posted by

The Cobden Centre
by Thorsten Polleit  

"Since spring 2013, the Fed has been playing with the idea of raising rates, which it had suppressed to basically zero percent in December 2008. So far, however, it has not taken any action. Upon closer inspection, the reason is obvious. With its policy of extremely low interest rates, the Fed is fueling an artificial economic expansion and inflating asset prices." (11/02/15)

http://www.cobdencentre.org/2015/11/the-fed-cant-raise-rates-but-must-pretend-it-will/  

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The Fed can’t raise rates, but must pretend it will

October 26, 2015
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Thorsten Polleit  

"Waiting for Godot is a play written by the Irish novelist Samuel B. Beckett in the late 1940s in which two characters, Vladimir and Estragon, keep waiting endlessly and in vain for the coming of someone named Godot. The storyline bears some resemblance to the Federal Reserve's talk about raising interest rates." (10/26/15)

https://mises.org/library/fed-can%E2%80%99t-raise-rates-must-pretend-it-will  

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More really good news

October 16, 2015
posted by

Scott Sumner EconLog
by Scott Sumner  

"I recently pointed out that Fed officials are becoming more receptive to the market monetarist proposal for negative interest on reserves. Today there is more progress, on an even more important front. First let me provide a bit of background information. Back in late 2008 and early 2009 I argued that monetary policy was extremely tight, despite low interest rates. Most people scoffed at that claim, they'd say, 'everyone knows monetary policy is highly accommodative.' A new press report (sent to me by Michael Jurka) suggests that even the Fed is coming around to the market monetarist view that low interest rates don't mean easy money ..." (10/15/15)

http://econlog.econlib.org/archives/2015/10/more_really_goo.html  

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The pitfalls of the Federal Reserve’s zero interest rate policy

October 16, 2015
posted by

Cato Institute Cato Institute
by James A Dorn  

"The Federal Reserve has kept its target range for the federal funds rate at 0 to 0.25 percent since December 2008. This is often referred to as the Fed's 'zero interest rate policy,' or ZIRP. The purpose of near-zero overnight rates -- and forward guidance to convince markets that those rates will be maintained -- has been to affect the entire rate structure: keeping all rates lower than they would have been in a free capital market." (10/15/15)

http://bit.ly/1Kcu7Yq  

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Market monetarism continues to make progress

October 13, 2015
posted by

Scott Sumner EconLog
by Scott Sumner  

"In early October 2009, the Fed first adopted a positive interest rate on reserves, and then raised it twice in November. Just imagine that instead the Fed had cut IOR to negative 0.75% in their September 16, 2008 meeting, two days after Lehman failed. (At the time the fed funds target was positive 2%.) Perhaps TARP would not have even been necessary. Now the Fed needs to reconsider their views on level targeting, which is even more powerful than negative IOR during a recession. And then NGDP level targeting." (10/12/15)

http://econlog.econlib.org/archives/2015/10/market_monetari_2.html  

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Ben Bernanke and the art of central banking

October 12, 2015
posted by

Cato Institute Cato Institute
by George Selgin  

"Like any experienced Fed chairman, Ben Bernanke knows how to choose his words carefully. So the triumphalist headline, 'How the Fed Saved the Economy,' assigned to his Oct. 4 Wall Street Journal column, probably wasn't his doing. Still the question remains: did the Fed really save us? Bernanke suggests that it did. But the evidence he musters leaves plenty of room for doubt." (10/09/15)

http://bit.ly/1hy833y  

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Time to end monetary central planning

October 6, 2015
posted by

Richard M. Ebeling Future of Freedom Foundation
by Richard M Ebeling  

"There is no way to describe current Federal Reserve policy other than as monetary confusion and misdirection. In a nutshell, Janet Yellen and the other members of the Fed’s Board of Governors have no idea what to do. Do they raise certain interest rates over which they have some direct influence? Do they keep them at their current rock bottom levels, as they have for the last six years?" (10/06/15)

http://bit.ly/1jMobAa  

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