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<p>New York (AFP) - The New York Federal Reserve Bank said Friday it will continue to inject billions into the US financial plumbing on a daily basis through November 4, extending the operations by three weeks.</p> <p>The effort, begun in mid-September, is aimed at preventing a spike in short-term interest rates, the New York Fed said in a statement.</p>

he Federal Reserve on Tuesday injected longer-term cash into the U.S. banking system in an effort to meet the funding needs of banks and Wall Street following a bout of turbulence in money markets last week. The New York Federal Reserve added $30.0 billion cash into the banking system through 14-day loans to primary dealers. These 14-day term repurchase agreements (repo) were on top of the $75 billion in temporary cash through an overnight repo operation. Primary dealers, or the top 24 Wall Street firms that do business directly with Fed, borrow from the central bank by using their Treasuries...

Dear Chuck, I can’t wrap my head around negative interest rates. What does this mean for my savings accounts in the bank? Can you help me figure this out? Confused about Rates Dear Confused,You are not the only one who finds this a challenge to understand. Simply put, it inverts the model that we have known and practiced for years: putting savings (money) in the bank to earn interest not to pay interest!Some History and Bigger Picture Negative interest rates have historically been used to combat deflation. Finance writer Justin Kuepper explains,“...deflation causes people and businesses to hoard cash rather...

Fed Admits Failure of ‘Plan A’ to Control Money Market Rates, Shifts Back to Repos (which was ‘Plan A’ till 2008) The hullabaloo in the repo market torpedoed the function of Interest on Excess Reserves and forced the Fed to go back to the future. With its announcement this morning, the New York Fed confirmed that the Fed’s Plan A of manipulating the federal funds rate into its target range – now between 1.75% and 2.0% — has miserably failed, and that it will switch to Plan B to control short-term interest rates. But this Plan B used to...

President Donald Trump on Wednesday harshly rebuked the Federal Reserve, accusing the central bank and Fed Chair Jerome Powell of having “no guts” by not meting out a more aggressive interest rate cut as the global economy slows. The Federal Reserve on Wednesday cut interest rates again by 25 basis points to a new target range of 1.75% to 2%, and telegraphed a strong likelihood of one more rate cut by the end of the year. However, some on Wall Street anticipated a more aggressive easing of 50 basis points, particularly with financial markets conditions tightening. Indeed, markets sank to...

The central bank announces it’s taking down its benchmark overnight lending rate to a target range of 1.75% to 2%. According to the Fed’s “dot plot” of individual expectations, five members thought the FOMC should have held its previous range of 2% to 2.25%, five approved of the 25 basis point cut but keeping rates there through the rest of the year, and seven favored at least one more cut this year. The Federal Reserve approved a much-anticipated quarter-point interest rate cut Wednesday but offered few indications that further reductions are ahead as members split on what to do next......

President Donald Trump on Wednesday continued his verbal assault on the Federal Reserve, which he blames for slowing the economy, tweeting that the central bank should cut interest rates to zero or even set negative interest rates. The president also called Fed officials “boneheads” in the tweet.

..... Speaking at the conference, Fischer said: "The problem with Trump's approach to trade is that he doesn't understand trade. Trump only understands if somebody wins and somebody loses. Both sides profit if they have a head on them and they know how to conduct negotiations." "I understand that Trump is an expert on this," he added. Fischer also mentioned the book "The Art of the Deal," authored by Trump or someone who wrote it "in his name." "That's not what happens in international trade," Fischer said about the book. "Trump....simply does not understand, and if he does understand then...

RALEIGH, N.C. - Today, Senator Thom Tillis (R-NC), a member of the Senate Banking Committee, issued the following statement after the former Fed monetary Vice Chairman Bill Dudley proposed that the Fed meddle in the presidential election to defeat President Trump: I am very disappointed that former Fed monetary Vice Chairman Bill Dudley is lobbying the Fed to use its authority as a political weapon against President Trump. The President is standing up for America against China after 30 years of our country and our workers being ripped off and there is now an effort to get the Fed to...

Having destroyed discipline, central banks have no way out of the corner they've painted us into. It was such a wonderful fantasy: just give a handful of bankers, financiers and corporations trillions of dollars at near-zero rates of interest, and this flood of credit and cash into the apex of the wealth-power pyramid would magically generate a new round of investments in productivity-improving infrastructure and equipment, which would trickle down to the masses in the form of higher wages, enabling the masses to borrow and spend more on consumption, powering the Nirvana of modern economics: a self-sustaining, self-reinforcing expansion of...

There are three negative supply shocks that could trigger a global recession by 2020. All of them reflect political factors affecting international relations, two involve China, and the United States is at the center of each. Moreover, none of them is amenable to the traditional tools of countercyclical macroeconomic policy. The first potential shock stems from the Sino-American trade and currency war, which escalated earlier this month when President Donald Trump’s administration threatened additional tariffs on Chinese exports, and formally labeled China a currency manipulator. The second concerns the slow-brewing cold war between the U.S. and China over technology. In...

Donald Trump ordered US companies to leave China on Friday after launching another blistering attack on Federal Reserve chairman Jerome Powell, asking “who is our bigger enemy, Jay Powell or [China’s] Chairman Xi?” Moments after Federal Reserve chairman, Jerome Powell, warned the US central bank was facing a “new challenge” as it deals with the Trump administration’s seesaw trade policies and ongoing dispute with China, Trump went on a Twitter rampage calling for a US boycott.

St. Louis Federal Reserve President James Bullard said Friday the central bank should continue to ease monetary policy because of the recession signal being flashed by the bond market. “The yield curve is inverted here. We’ve got one of the higher rates on the yield curve here. That’s not a good place to be,” Bullard told CNBC’s Steve Liesman. The so-called yield-curve inversion refers to the 10-year Treasury yield trading below its 2-year counterpart. This briefly happened earlier this week and last week. Experts fear a yield-curve inversion because it has historically preceded a recession.

President Donald Trump is calling on the Federal Reserve to cut interest rates by at least a full percentage point "over a fairly short period of time," saying that such an action would make the U.S. economy even better and would also "greatly and quickly" enhance the global economy. In two tweets Monday, Trump kept up his pressure on the Fed and its chairman Jerome Powell, saying the U.S. economy was strong "despite the horrendous lack of vision by Jay Powell and the Fed." Powell is Trump's hand-picked choice for the top Fed job. He said Democrats were trying to...

In the hours before American equity markets open for trading, China sent a huge sell signal to the traders on Wall Street. Bloomberg reports: China called planned U.S. tariffs on an additional $300 billion in Chinese goods a violation of accords reached by Presidents Donald Trump and Xi Jinping, signaling an American move earlier this week to delay some of those levies was not enough to stave off retaliation. The effects already are manifest: European stocks declined and U.S. equity futures fell. The Stoxx Europe 600 index moved lower while the three main American equity contracts dropped. President Trump...

*** The bond market is taking on the Fed, betting the Fed is mistaken in its view that it does not need to cut rates very much, strategists say. *** The market is betting inflation will be much lower than the Fed expects it will be, and that will force the Fed to keep cutting rates. *** Stunning moves across the Treasury curves sent yields sharply lower, and the benchmark 10-year yield was edging toward a 3-year low, while stocks rose sharply in response. The bond market is bent on having its way and is now pricing in a Fed...

What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world ... As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place - no inflation. We are winning anyway, but I am certainly not getting much help from the Federal Reserve!

The Federal Reserve on Wednesday lowered interest rates for the first time since the Great Recession in 2008 to help stave off the possibility of an economic downturn. Policymakers led by Fed Chairman Jerome Powell voted 8-2 in favor of a small cut in the federal funds rate, and recommitted to their promise to "act as appropriate" to sustain the country's longest economic expansion in history. Interest rates, which affect the cost of borrowing for credit cards and mortgages, are now set to hover between 2% and 2.25%. The rate cut follows months of pressure from President Donald Trump, who...

With almost no inflation, our Country is needlessly being forced to pay a MUCH higher interest rate than other countries only because of a very misguided Federal Reserve. In addition, Quantitative Tightening is continuing, making it harder for our Country to compete. As good as we have done, it could have been soooo much better. Interest rate costs should have been much lower, & GDP & our Country’s wealth accumulation much higher. Such a waste of time & money. Also, very unfair that other countries manipulate their currencies and pump money in! It is far more costly for the Federal...

The White House projects that the federal deficit will surpass $1 trillion this year, the only time in the nation's history the deficit has exceeded that level, excluding the four-year period following the Great Recession. "The 2019 deficit has been revised to a projected $1.0 trillion," the White House Office of Management and Budget (OMB) wrote in its midyear review. As a candidate, President Trump promised to wipe out not only the deficit but the entire federal debt, which has surpassed $22 trillion. Republicans cast aside projections that their 2017 tax reform law would add $1.9 trillion to the deficit...