Federal Reservations

I always read Jon Hilsenrath's articles on the Fed very closely. Right now the Fed seems uncertain about QE3, and the decision remains data dependent (as always) ... from Hilsenrath at the WSJ: Fed Takes a Break To Weigh Outlook

Fed officials meeting next week are unlikely to take any new actions to spur the recovery, and they are likely to emerge with a slightly more upbeat—but still very guarded—assessment of the economy's performance.
...
A big question is whether the Fed will launch a new bond-buying program in an effort to push down already low long-term interest rates.
...
Mr. Bernanke signaled to Congress last week that he had doubts about the sustainability of the employment gains. Fed officials aren't inclined to move while they try to solve the puzzle. "In light of the somewhat different signals received recently from the labor market than from indicators of final demand and production," he said, "it will be especially important to evaluate incoming information to assess the underlying pace of economic recovery."

Several economists still expect QE3 to be announced at one of the two day meetings in April or June - or maybe in Q3.

Goldman Sachs economists wrote on Friday:

We expect that the Fed will ultimately announce a return to balance sheet expansion sometime in the first half of 2012, likely including purchases of mortgagebacked securities (MBS).

And Merrill Lynch noted last week:

In our view, it is wishful thinking to believe the Fed will do QE when the data flow is healthy. We expect renewed QE only after Operation Twist ends in June ... only if the economy is slowing ... Under our growth forecast ... QE3 comes in September.

If the economy slows, and key inflation measures start falling again - then QE3 is very likely. But right now, with most data a little better than expected, and inflation a little higher than the Fed's target, the Fed is back to "wait and see". The next FOMC meeting is on Tuesday March 13th.

Yesterday:
• Summary for Week ending March 2nd
• Schedule for Week of March 4th

Originally from Calculated Risk

Everything I’ve been warning about regarding the fallout from global central bankers’ love affair with inflation is coming to fruition. Consumers are once again dealing with the fact that the cost of filling up their gas tank is eating a significant portion of their disposable income. The price of a barrel of oil is now soaring above $100 a barrel; just as it always has done when the Fed has gone on one of their counterfeiting sprees. And it’s not just dollars that have been eroding in value because the price of oil in Euros is now at a record high. The sad truth is that with each iteration of QE, either in the U.S. or around the globe, it has sent oil prices skyrocketing, inflation rising and the economy into the tank.

Originally from The Market Oracle

The recent improvement in the unemployment rate has put the Federal Reserve on alert and watching incoming data closely, said Federal Reserve Board Chairman Ben Bernanke on Wednesday.

Originally from MarketWatch

The recent improvement in the unemployment rate has put the Federal Reserve on alert and watching incoming data closely, said Federal Reserve Board Chairman Ben Bernanke on Wednesday.

Originally from MarketWatch

The recent improvement in the unemployment rate has put the Federal Reserve on alert and watching incoming data closely, said Federal Reserve Board Chairman Ben Bernanke on Wednesday.

Originally from MarketWatch

Here is the truth behind the stock market as stated by Ben Bernanke of the US Federal Reserve.

The herd: But the SP500 cant go down … [visit site to read more] or compare Credit Card Rewards and Best Credit Cards

Originally from DailyMarkets.com

Wall Street will be listening closely to Federal Reserve Chairman Ben Bernanke over the next two days for any signs of distancing himself from the central bank’s pledge to keep rates at ultra-low levels for up to three years.

Originally from MarketWatch

Poking around in FRED while thinking about money created by banks and by government, I came up with the following graph, which I found to be pretty eye-popping:

Federal Debt Held by the Public as a Percentage of Total Credit Market Debt Owed

That’s a pretty profound secular shift. But far from delivering any obvious conclusions for me, it raises several questions.

• First, what’s included in TCMDO? (Is there a glossary of these measures available somewhere? I haven’t been able to find one.) I assume government bills and bonds are included — including those held by the Fed. I assume it does not include bonds held by the Social Security trust fund — nonpublic debt. (Or does it?)

• Since financial industry debt is “different,” what does the graph look like if we exclude that?

Federal Debt Held by the Public as a Percentage of (Total Credit Market Debt Owed – Financial Sector Debt Owed)

• Should we adjust for credit-market instruments held by the Fed?

• Are there more illuminating measures to display in this graph?

• What does this say about the stock of “safe assets” in the economy?

• How does this relate to JKH and Steve Waldman’s notions of government money (created through deficit spending) as “leverage” — in Michael Sankowski’s words: “JKH points out (S-I) is like the denominator in leverage. When (S-I) [govt deficit spending plus/minus trade imbalance] gets too small compared to S or I, then the private sector steps in with private creation of S. But these claims aren’t always as credible as government NFA. Plus, private sector S can sometimes be marked to market in ways which makes valuation difficult.”

Sorry to be so inconclusive. As always I’m hoping to be educated by finer minds than mine.

Cross-posted at Asymptosis.

Originally from Angry Bear

The Fed does not like to surprise the markets. They telegraph policy changes well in advance. The coded language of Alan Greenspan has been replaced with plain english and press conferences under Bernanke. The Fed's monetary policy may be questionable but their strategy of being more transparent to the market has improved albeit far from perfect.

Originally from The Market Oracle

The Federal Reserve released new data this week on delinquency and charge-off rates at U.S. commercial banks for the fourth quarter of 2011. For consumer credit cards, the delinquency rate fell for the 10th consecutive quarter to 3.27% during the October-December period last year, dropping to the lowest level since a 3.24% reading in the third quarter of 1994, more than 17 years ago (see blue line in chart). Compared to the 4.50% quarterly average since 1991, the delinquency rate on credit … [visit site to read more] or compare Credit Card Rewards and Best Credit Cards

Originally from DailyMarkets.com