Federal Reserve officials saw diminishing economic benefits from the central bank’s bond buying program and voiced concern about risks to financial stability, according to minutes of their last meeting, when they took the first step to cut the pace of purchases.
Federal Reserve policy makers last month debated an April interest-rate hike, with several officials leaning against such a move because it would send the wrong signal and others saying it might be warranted.
“Several expressed the view that a cautious approach to raising rates would be prudent or noted their concern that raising the target range as soon as April would signal a sense of urgency they did not think appropriate,” minutes of the Federal Open Market Committee’s March 15-16 meeting released Wednesday in Washington said.
Read about the US through the lens of politics and everything is horrible.
Look only at the US economy and things aren't so bad. And if you ask the most important US consumers, things are about to get better.
NEW DELHI: The US Federal Reserve released the minutes of the December 13-14 policy review on Wednesday, which hinted at a higher probability of rate hikes in the coming months. There are also signs that the US dollar might strengthen further going forward. The minutes revealed what the Fed policy makers were thinking before raising policy rate by 25 basis points at the much-anticipated December review. Here are a couple of takeaways from the Fed minutes.
European stocks slipped from an 11 month high, Asian stocks and S&P futures were flat as caution pervades global markets before the Federal Reserve’s expected interest-rate hike on Wednesday. Crude dropped to session lows near $52 after API data showed U.S. stockpiles increased, and after a Manaar Group consultant said Iraq won’t cut output by 180k b/d-220k b/d as it committed to do under Nov. 30 OPEC agreement.
"The risks of the Fed doing nothing are indeed real, and we look to be poised to repeat the same mistakes of the past." In a note to clients on Monday, John Silvia, chief economist at Wells Fargo, explores the risks the Federal Reserve is currently running by keeping interest rates pegged at 0% as it has since the depths of the financial crisis.
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Last week, the bulls pulled another save out of their hat – turning what initially looked like a losing week into a respectable advance to a new 12-week high.
The broad market rebound came on the heels of three individual policymaker statements, all aimed at restoring confidence and reviving sentiment before the selling could pick up momentum.
Today we are fortunate to have a guest contribution written by Joseph E. Gagnon of the Peterson Institute of International Economics.
On June 20, 2012, the Federal Reserve System’s Federal Open Market Committee extinguished the last shred of doubt as to whether it intends to achieve its mandated objectives. Despite a substantial markdown of an already inadequate forecast, the Fed did not take any actions that would make it possible to achieve either of its objectives over the foreseeable future.