Federal Reserve creates financial stability committee

WASHINGTON--The Federal Reserve is elevating its postcrisis efforts to monitor potential threats to financial stability, creating a high-level committee led by the central bank’s No. 2 official.

Fed won't raise interest rates for "some time": Williams

SUN VALLEY, Idaho, June 30 (Reuters) - The U.S economy will likely have returned to full employment and a healthy level of inflation by the end of 2016, a top Federal Reserve official predicted on Monday, even as he reiterated his view that interest rates will need to stay near zero for some time.

Downside of low inflation: A weaker global economy

WASHINGTON (AP) — What the global economy could use right now is a dose of higher prices, though that might be unfathomable to people who still bear scars from the double-digit inflation of the 1970s.

Top Fed officials zero in on next policy steps

(Reuters) - The U.S. Federal Reserve, having just reduced its bond-buying program, now appears deep in debate over the best way to unwind its extraordinary stimulus in the months and years ahead.

US Federal Reserve to trim stimulus in coming months

Federal Reserve officials said they plan to begin trimming the central bank's stimulus efforts in "the coming months".

US Fed expected to announce stimulus slowdown

WASHINGTON: Many investors expect the U.S. Federal Reserve to announce a shift in course Wednesday and take its first step toward slowing the economic stimulus it has supplied since the financial crisis and the Great Recession swept through the economy five years ago.

US hiring slows in July but jobless rate falls to 4-yr low

WASHINGTON: US employers slowed their pace of hiring in July but the jobless rate fell anyway, mixed signals that could make the U.S. Federal Reserve more cautious about drawing down its huge economic stimulus program.

Factory, labor market data offer bright sign for US economy

WASHINGTON: New claims for U.S. jobless benefits fell last week and factory activity picked up in the Mid-Atlantic region in early July, signs of a stronger economy that could help push the Federal Reserve to ease its monetary stimulus.

Lew says delays on rules may mean big bank risk

WASHINGTON (AP) — U.S. Treasury Secretary Jacob Lew says delays in writing rules to put the 2010 financial overhaul law into effect have raised the prospect that big banks could still threaten the financial system's stability.

Inflation shows signs of stability after downward drift

WASHINGTON (Reuters) - Consumer prices picked up in June and underlying inflation pressures showed signs of stabilizing, keeping on course expectations the Federal Reserve will start reducing its bond purchases later this year.

Fed's Plosser says jobs report another reason to trim QE3

(Reuters) - The latest U.S. jobs report on Friday showed that government spending cuts have so far not been as damaging as some feared, Philadelphia Fed President Charles Plosser said, adding it only entrenched his opinion that the central bank should reduce its bond buying "now."

Fed's Bernanke warns shadow banking risks persist

(Reuters) - Federal Reserve Chairman Ben Bernanke said on Friday that the shadow banking system still posed a threat to financial stability, and funding markets might still not be able to cope with a major default.

Bernanke: US economy 'still far' from desired state

WASHINGTON: Federal Reserve Chairman Ben Bernanke said Monday that the US economy still has far to go to recover to an acceptable state of health.

Bernanke wants you to buy stocks, but risk is high

Ben Bernanke hopes his latest plan to stimulate the economy will get you to buy stocks and other risky assets. Maybe you should. People who did that after two similar Federal Reserve efforts are sitting on big gains today.

Debt crisis: Mario Draghi cancels Jackson Hole appearance

European Central Bank president Mario Draghi will not attend the US Federal Reserve's Jackson Hole gathering of central bankers later this week due to a heavy workload, a spokesman said Tuesday.

How low can US jobless rate really fall?

NEW YORK/WASHINGTON: Gary Feeman has been searching for a job for 16 months. He's not ready to give up just yet, but the 60-year-old worries he is running out of options.

US Fed indicates smaller chance of more QE

Federal Reserve policymakers appear less keen to launch a fresh round of monetary stimulus as the US economy gradually improves, according to minutes for the central bank's March meeting.

Financial stability equal to monetary policy, says Bernanke

Central banks should view financial stability as being just as important as monetary policy, the chairman of the US Federal Reserve suggested last night.

Speaking at the Federal Reserve Bank of Boston’s economic conference, Ben Bernanke  said he expects monetary policy will continue to be standard approach used by central banks to promote macroeconomic stabilisation.

Fed's Bernanke defends new economic recovery plan

US Federal Reserve Chairman Ben Bernanke has backed the the central bank's new $600bn (£371bn) package to boost the economy.

And he has rejected fears that it may spur inflation.

Some Fed officials worry the money being pumped into the economy could create inflation or speculative bubbles in the prices of bonds or commodities.

But Mr Bernanke says the programme, unveiled on Wednesday, will not push inflation to "super ordinary" levels.
Criticism

Germany, China, Brazil and South Africa have criticised the US plan, with the German Finance Minister Wolfgang Schaeuble saying it was "clueless" and would create "extra problems for the world".

China's Central Bank head Zhou Xiaochuan has urged global currency reforms, while South Africa said developing countries would suffer most.

South Africa's finance minister Pravin Gordhan warned that "developing countries, including South Africa, would bear the brunt of the US decision to open its flood gates without due consideration of the consequences for other nations."

The US policy "undermines the spirit of multilateral co-operation that G20 leaders have fought so hard to maintain during the current crisis," he said.

The heads of state and government of the G20 group of the world's leading nations is due to meet in a week in South Korea, with currencies and trade imbalances high on the agenda.
Dual mandate

"We're not in the business of trying to create inflation, our purpose is to provide additional stimulus to help the economy recover and to avoid potentially additional disinflation, which I think we all agree could also be worrisome," Mr Bernanke said at the weekend.

He said the Fed was bound by a dual mandate for low and stable prices and firm employment, and by a duty to support the economy.

"We are committed to our price stability objective," said Mr Bernanke.

"I have rejected any notion that we are going to raise inflation to a supra-normal level.

"We've had a very significant disinflation since the beginning of the crisis. We should not be satisfied with a situation where we have both a large amount of slack on the employment side and inflation which is below our generally agreed upon level and seems to be declining over time."

That, he said, was the motivation for taking the action which will see the Fed buy $600bn worth of government bonds in a bid to make loans cheaper and get Americans to spend more.


Source:BBC
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