Federal Reservations

WASHINGTON (MarketWatch) - The Federal Reserve has potent tools at its disposal to help the economy and is never "out of ammunition," St. Louis Federal Reserve President James Bullard said Friday. In a speech at Point Loma Nazarene University in San Diego, Bullard said he expects modest growth over the next year but the slow pace of the recovery leaves it vulnerable to further negative shocks. If the economy deteriorates, the Fed should respond with more bond purchases with the amounts decided meeting-by-meeting, Bullard said. Simply promising to keep low policy rates for longer and longer periods of time may lead to an unwanted "Japanese-style outcome" of low rates and mild deflation, Bullard said.

Originally from MarketWatch

Many people believe the Jackson Hole was a non-event, a failure and it was. QE 3 was not announced, as we predicted. We believe that was being saved for mid-September when the $300 billion rollover in Treasury securities is completed. Mr. Bernanke has failed in a number of respects, the most glaring being zero interest rates for 2-years and no housing recovery.

Originally from The Market Oracle

Over the past several years, the Federal Reserve and the U.S. government have tried everything that they can think of to stimulate this dead horse of an economy but nothing has worked.  The Fed has slashed the federal funds rate to record low levels, mortgage rates have been pushed to all-time lows and the U.S. government has spent hundreds of billions of dollars in an effort to get the economy going.  But despite all these of these extraordinary efforts, the U.S. economy continues to … [visit site to read more]

Originally from Daily Markets

Federal Reserve Chairman Ben Bernanke will deliver his semi-annual testimony to the U.S. Congress this week, and investors are keen to find out just how open he is to the possibility of further monetary easing.

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