Federal Reserve

  • 2020-01-24 10:45


    --Ex-Kansas Fed President Sees Steady Rates This Year

    WASHINGTON (MNI) - The Federal Reserve won't be able to reverse ultra-easy monetary policies for at least a decade, adding risk to the financial system, former Kansas City Fed President Thomas Hoenig told MNI.

    The Fed is getting stuck in a world of ample bank reserves and extensive bond purchases in a financial system already characterized by excess leverage, Hoenig said in an interview. Hoenig also saw little chance the Fed will move its policy rate this year.

    "Now QE is the policy tool -- they're trapped and I don't see how they're getting out of it anytime soon," he said.

  • 2020-01-21 14:11


    By Evan Ryser

    WASHINGTON (MNI) - The Federal Reserve is practically engaging in quantitative easing without officially announcing such a policy, President Donald Trump's top economic adviser Larry Kudlow said Tuesday.

    Asked whether the Fed's Treasury bill purchases is another way for the Fed to quietly do QE, "I basically do," Kudlow said in a panel in Davos, Switzerland.

    "The net effect is they are expanding the balance sheet, whatever you wish to call it. I think it's not a coincidence that the stock market and housing market -- and indeed asset prices -- are rising again," he told the World Economic Forum.

    "The stock market has been a mirror of all this stuff. It's almost uncanny," Kudlow said.

  • 2020-01-20 07:00


    By Evan Ryser

    WASHINGTON (MNI) - Climate change threatens the price stability targets of central banks and the damage could force them to rescue the financial system again, the Bank for International Settlements said in a research paper Monday.

    Central banks may have to become "climate rescuers of last resort" and buy large sets of devalued or carbon-intensive assets, said the paper from the Switzerland-based BIS.

    "A new global financial crisis triggered by climate change would render central banks and financial supervisors powerless," said the paper by BIS Deputy General Manager Luiz Awazu Pereira da Silva and co-authors Patrick Bolton, Morgan Despres, Frederic Samama and Romain Svartzman.

    Central banks have a role to play in avoiding such an outcome, like providi

  • 2020-01-17 12:45


    By Jean Yung

    WASHINGTON (MNI) - Federal Reserve Governor Randy Quarles on Friday laid out proposals to increase transparency in how the Fed supervises banks, including giving them more time to review their stress test results and seeking public and Congressional input on the Fed's supervisory guidance.

    The Fed Board could provide more transparency on the design of its stress test, make their requirements less "volatile" from year-to-year and allow firms more time to review their results, Quarles said in remarks prepared for an American Bar Association meeting in Washington.

  • 2020-01-17 08:34


    By Evan Ryser

    WASHINGTON (MNI) - President Donald Trump is sending long-delayed Federal Reserve Board of Governors nominations of Judy Shelton and Christopher Waller to the Senate for confirmation, according to an announcement from the White House on Thursday.

    Shelton, a former adviser to President Trump's 2016 presidential bid and controversial economist who most recently served as the U.S. executive director at the European Bank for Reconstruction and Development, and Waller, the research director and executive vice president of the St. Louis Fed, were originally named as potential nominees by Trump in early July in the form of a tweet.

    Shelton has been nominated to a term expiring in Jan. 2024 and Waller to a term expiring in Jan. 2030.

  • 2020-01-16 10:00


    By Evan Ryser

    WASHINGTON (MNI) - National indicators suggest a positive outlook for the housing sector over the next several quarters despite headwinds due to tight labor markets hitting some building companies and a declining presence of community banks, Federal Reserve Board Governor Michelle Bowman said Thursday.

    The economy is in a good place with a baseline outlook for continued moderate growth over the next few years, Bowman said. Unemployment is expected to remain low and inflation though it has been muted is expected to rise gradually to the FOMC's 2% objective.

    "I remain optimistic about the outlook for housing," Bowman said before the Home Builders Association of Greater Kansas City.

  • 2020-01-15 14:00


    WASHINGTON (MNI) - The following is the text of the summary section of the Federal Reserve's summary of economic conditions report, or Beige Book, released Wednesday:

    Overall Economic Activity

    Ecconomic activity generally continued to expand modestly in the final six weeks of 2019. The Dallas and Richmond Districts noted above-average growth, while Philadelphia, St. Louis, and Kansas City reported sub-par growth. Consumer spending grew at a modest to moderate pace, with a number of Districts noting some pickup from the prior reporting period. On balance, holiday sales were said to be solid, with several Districts noting the growing importance of online shopping. Vehicle sales generally expanded moderately, though a handful of Districts reported flat sales.

  • 2020-01-14 16:29


    By Evan Ryser

    KANSAS CITY (MNI) - Kansas City Fed President Esther George is not ready to endorse controlling the yield curve as a way to counter any downturn and bring inflation back to target.

    George said Tuesday policymakers are "likely to find themselves looking deep into the policy toolkit to fight future recessionary shocks."

    Asked by the audience what tools would be needed in a downturn and whether that includes quantitative easing and forward guidance, George said: "In a perfect world neither of those are completely satisfactory to us, but obviously there are things ...

  • 2020-01-13 10:05


    By Jean Yung

    WASHINGTON (MNI) - Inflation could accelerate by more than forecasters currently expect if firms are unwilling to absorb rising wages in a tight labor market, Boston Federal Reserve Bank President Eric Rosengren warned Monday.

    Both private forecasters and Fed officials project a positive view for 2020, with growth near potential, inflation returning to the Fed's 2% target and a strong job market, Rosengren said. But the risk of inflation building more quickly than it has, as well as low rates pushing investors to chase profits in the real estate sector, pose risks to this outlook.

  • 2020-01-09 15:35


    By Jean Yung

    RICHMOND, VA. (MNI) - Richmond Fed President Tom Barkin is open to studying ways to ensure smooth operating money markets such as reducing the volatility of the Treasury General Account, tailoring liquidity regulations and creating a standing repo facility.

    While he has yet to see evidence the liquidity crunch in money markets late last year was driven by liquidity regulation, "I'd certainly be open to appropriate tailoring if that makes sense," he told reporters Thursday on the sidelines of a Virginia Bankers Association luncheon.