Federal Reservations

The Fed left current policies intact and opted not to take any action today after implementing far reaching policy changes at the August and September FOMC meetings. Fed President Evans of the Chicago Fed cast the dissenting vote and would have preferred to provide more monetary policy accommodation. This is in stark contrast to the three dissents in August and September when Fed Presidents of Dallas, Minneapolis, and Philadelphia voted against the decision to hold the policy rate unchanged until mid-2013 and to undertake the maturity extension program of $400 billion dollars. Fed President Rosengren of Boston had cast a similar dissent in December 2007 arguing for a larger cut of the federal funds rate when the Fed lowered the policy rate by 25 bps to 4.25%.

Originally from The Market Oracle

First, from the WSJ: Central Banks Boost Dollar Liquidity

The ECB said that it will be joined by U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank to conduct three U.S. dollar liquidity-providing operations.

The action addresses an acute shortage of dollar availability as U.S. lenders withheld funds [from European banks] ... The new dollar tenders, under which banks will be able to bid for unlimited funds, will have a maturity of approximately three months covering the end of the year, the ECB said.

From the Philly Fed: September 2011 Business Outlook Survey

The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a very low reading of -30.7 in August to -17.5 in September. The index has been negative in three of the last four months (see Chart). The current new orders index paralleled the general activity index, increasing 16 points and remaining negative. The current shipments index fell 9 points.
...
Firms' responses suggest a slight improvement in hiring this month compared with August. The current employment index increased 11 points, after recording its first negative reading in 12 months in August. Over 22 percent of the firms reported an increase in employment, but 16 percent reported a decrease. The percentage of firms reporting a shorter workweek (23 percent) remained greater than the percentage reporting a longer one (9 percent).

This indicates contraction in September and was slightly below the consensus forecast of -15.0.

Click on graph for larger image in graph gallery.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index. The dashed green line is an average of the NY Fed (Empire State) and Philly Fed surveys through September. The ISM and total Fed surveys are through August.

The average of the Empire State and Philly Fed surveys rebounded in September, but is still well below zero - possibly indicating a further decline in the ISM index.

Originally from Calculated Risk

Forexpros – Manufacturing activity in the Philadelphia-region rose less-than-expected in July, official data showed on Thursday.<br /><br />In a report, the Federal Reserve Bank of Philadelphia said that its manufacturing index improved to 3.2 in July from June&rsquo;s reading of minus 7.7. <br /><br />Analysts had expected the index to increase to 3.4 in July.<br /><br />On the index, a reading above 0.0 indicates improving conditions, below indicates … [visit site to read more] or compare Best Credit Cards and Balance Transfer Credit Cards

Originally from DailyMarkets.com

Bernanke came out and started by saying there was ample accomodation and the Fed was not prepared to add additional accomodation at this point. Yesterday the market interpreted his outline of what the Fed could do as a clue that they were likely to ease (ie.. QE3) sooner rather than later. 

The EURUSD has move below the trendline on the hourly chart at the 1.4195 level now and this level will be eyed as the volatile trade continues with the comments.  A move above this level could … [visit site to read more] or compare Best Credit Cards and Balance Transfer Credit Cards

Originally from DailyMarkets.com

WASHINGTON (MarketWatch) - The Federal Reserve on Wednesday adopted debit-card swipe-fee rules that are more beneficial to banks than had been expected. The Fed rule cuts fees retailers pay to accept debit-card payments to 21 cents, plus a conditional charge of a penny and 0.05% of the transaction value for fraud prevention. On the average debit transaction of $38, the Fed's rule would have retailers pay 23.9 cents, from the roughly 44 cents they currently pay. The initial proposal the Fed released in December would have cut fees that retailers pay to accept debit-card payments to a range of 7 to 12 cents a swipe. The new rules will still shift billions of dollars in revenue from financial institutions to merchants. Fed governor Elizabeth Duke voted against the decision, arguing that it will increase the regulatory burden on small issuers.

Originally from MarketWatch

The Federal Reserve adopted debit-card swipe-fee rules that are less harmful to banks than had been expected.

Originally from MarketWatch

The Federal Reserve is set to provide relief to banks when it votes Wednesday afternoon to adopt controversial debit-card rules that are set to shift billions of dollars in revenue from financial institutions to merchants.

Originally from MarketWatch

WASHINGTON (MarketWatch) - The Federal Reserve is set to provide relief to banks when it votes Wednesday afternoon to adopt controversial debit-card rules that are set to shift billions of dollars in revenue from financial institutions to merchants. According to a draft final rule released by the central bank, the Fed will vote to cut fees that retailers pay to accept debit-card payments to 21 cents, plus a conditional charge of a penny and 0.05% of the transaction value for fraud prevention. On the average debit transaction of $38, the Fed's proposal would have retailers pay 23.9 cents. A proposal the Fed released in December that would have cut fees that retailers pay to accept debit-card payments by an average of 73%, to a range of 7 to 12 cents a swipe. The Fed estimates that bank revenue is likely to decline by more than 40% under the rule. The rule is expected to impact network operators Visa and MasterCard , but the proposal specifically exempts the network American Express operates. The new fees would go into place in October.

Originally from MarketWatch

The Federal Reserve is set to provide relief to banks when it votes Wednesday afternoon to adopt controversial debit-card rules that are set to shift billions of dollars in revenue from financial institutions to merchants.

Originally from MarketWatch

WASHINGTON (Reuters) - Surging oil prices are deepening a split inside the Federal Reserve, blurring the likely direction of monetary policy and making next week's policy meeting all the more...

Originally from Reuters: Business News