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Federal Reserve Bank of New York officials secretly conducted real-time exercises during the 2011 and 2013 debt-limit crisis that demonstrated the federal government could function during a temporary shutdown by prioritizing spending, even as Treasury Secretary Jack Lew publicly claimed many times that such efforts were "unworkable," according to a new report by the House Financial Services Committee obtained by The Daily Caller News Foundation. The staff report, to be released Tuesday, charges that Lew and other Obama administration officials deliberately misled Congress and the public during the federal budget and debt limit showdowns in both years. The committee will...

Federal Reserve Bank of New York officials secretly conducted real-time exercises during the 2011 and 2013 debt-limit crisis that demonstrated the federal government could function during a temporary shutdown by prioritizing spending, even as Treasury Secretary Jack Lew publicly claimed many times that such efforts were “unworkable,” according to a new report by the House Financial Services Committee obtained by The Daily Caller News Foundation. The staff report, to be released Tuesday, charges that Lew and other Obama administration officials deliberately misled Congress and the public during the federal budget and debt limit showdowns in both years. The committee will...

The Federal Reserve this week will update its assessment of the U.S. economy and could take note of recent volatility in global financial markets. But any move or definite signal on interest rates is extremely unlikely. All the action will come in Wednesday’s policy statement, due out at 2 p.m. EST, since Chairwoman Janet Yellen isn’t scheduled to hold a press conference and officials won’t release updated economic projections until March. Here are five things to watch out of the two-day policy meeting that starts Tuesday. 1 Flexible Messaging The Fed won’t raise its benchmark federal-funds rate on Wednesday... 2...

Well, I guess we can rule out another rate hike in January. That's what economists are saying, not that anyone seriously believed that the Federal Reserve was going to engage in back-to-back hikes after promising that rates would go up only gradually in the months ahead. With Wall Street off to its worst annual start in history, stock prices have been but one indicator that the economy could slow in the weeks and months ahead. That should give the Fed pause. Stocks, of course, have not been the only market-based gauge to suggest that both the domestic, and global, economies...

WASHINGTON - The Federal Reserve handed over a record $97.7 billion in profits to the Treasury Department in 2015, according to preliminary figures released Monday.

As we’ve been warning for quite a while (too long for my taste): the world’s grand experiment with debt has come to an end. And it’s now unraveling. Just in the two weeks since the start of 2016, the US equity markets are down almost 10%. Their worst start to the year in history. Many other markets across the world are suffering worse. If you watched stock prices today, you likely had flashbacks to the financial crisis of 2008. At one point the Dow was down over 500 points, the S&P cracked below key support at 1,900, and the price...

With less than half an hour until the close, we asked the Atlanta Fed - the most accurate predictor of GDP - which was scheduled to post an update of its Q4 GDP NowCast following today's ugly economic data, if it was was planning on releasing its latest Q4 GDP estimate before or after the close, something it usually does just before noon.

In 2016, the Federal Reserve will pay at least $12.2 billion to U.S. and foreign banks to keep the money created via its quantitative easing programs out of the economy. If the Fed raises rates as expected next year, the amount nearly doubles to $23.1 billion. From 2008 to 2015, the Fed purchased over $4 trillion worth of bonds to stimulate growth in the economy. Risk markets responded, as is demonstrated by the close correlation between the S&P 500 and growth of the Fed's balance sheet through its bond purchases.

Nothing is more bungled in Washington than the role of money in our economy- and that's saying a lot. Almost no one understands how our dollar policy works, and those that say they do are the ones who screwed things all up. The Fed has today bid farewell to seven years of its zero interest rate policy. Hooray. Wall Street is petrified because investors have become hyper-dependent on this zero rate scheme and the floods of dollars injected into the economy just as an addict craves crack cocaine. But the high from easy money, just as with any hallucinogenic drug,...

On the 7th anniversary of entering ZIRP, and for the first time since June 29th 2006, The Federal Reserve announced today that it will try and raise interest rates: *FED RAISES INTEREST RATES 0.25 POINT IN UNANIMOUS VOTE Of course, the flowery language and dots are as dovish as possible while maintaining some semblance of credibility with regard growth expectations as The Fed unleashes a tightening cycle for the first time in over 11 years.

The Federal Reserve hiked interest rates for the first time in nearly a decade on Wednesday, signaling faith that the U.S. economy had largely overcome the wounds of the 2007-2009 financial crisis. The U.S. central bank's policy-setting committee raised the range of its benchmark interest rate by a quarter of a percentage point to between 0.25 percent and 0.50 percent, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs. "With the economy performing well and expected to continue to do so, the committee judges that a modest increase in the federal funds rate...

The Federal Reserve is about to raise interest rates for the first time in almost ten years and it couldn’t come at a worse time for the oil and gas industry. On the one hand, the oil boom was fueled by loose money from the Fed. With near-zero interest rates, money flowed into capital-intensive shale oil and gas drilling for many years. That succeeded in creating a production boom. But the boom was too successful – the glut caused prices to crash. In this sense, the Fed helped inflate the drilling bubble, which burst in 2014. Now the Fed is...

Federal Reserve Chair Janet Yellen made an interesting comment yesterday on today’s jobs report, suggesting the economy just needs to add around 100K jobs a month to be okay. Via Reuters: “To simply provide jobs for those who are newly entering the labor force probably requires under 100,000 jobs per month,” with anything above that helping “absorb” those who are unemployed, discouraged or had dropped out of the labor market, Yellen, who was speaking before Congress’ Joint Economic Committee, said in a question and answer session. That 100K number is much, much lower than the current 200K monthly average...

For a Republican, Ted Cruz has a unique criticism of the Federal Reserve. The conservative Texas senator and contender for the GOP presidential nomination argues that the central bank is responsible for causing the financial crisis and recession because it kept money too tight in 2008. Cruz's criticism of the Fed is nearly the opposite of the one typically voiced by Republicans, who generally fault Chairwoman Janet Yellen and her predecessor Ben Bernanke for their efforts to ease money. GOP complaints about the Fed have grown since the central bank lowered interest rates to zero and started quantitative easing programs....

Monetary Policy: Fed Chair Janet Yellen thinks the economy is so strong that the central bank can start raising rates this month. So why are Democrats alarmed? Because they know that the "Obama recovery" is hollow. It's true there have been marginal improvements in key economic indicators since 2008, as would be expected following the worst downturn since the Great Depression. But the "recovery" that was touted so loudly by Democrats until last year has also been the worst ever” 2% average growth. Now they're worried about the prospects of even a tiny hike in interest rates by the Fed....

Last week the House of Representatives passed a bill that would bring about the most sweeping changes to the Federal Reserve since the 1930s. At the heart of the bill is a requirement that the Fed set interest rates according to a quantitative rule. Like advocates of the gold standard, proponents of the bill blame many of the economy’s ills on the Fed exercising too much discretion... [snip] Legislating a rule doesn’t do away with discretion, but makes it more likely discretion will be exercised only after the rule has failed, perhaps at great economic cost. [snip] In a dynamic...

Monetary Policy: Congress is taking up a bill that would increase scrutiny of the Federal Reserve and better define its job. After years of badly executed and at times damaging central bank policy, it's about time. We share the misgivings of those who fear Congress micromanaging the economy through the Fed. In particular, Democrats seem prone to using the Fed as a giant piggy bank — such as the current foolish proposal to use Fed dividends to fund Congress' pet pork-barrel... [snip] So, yes, the ability of the Fed to do its job without daily political interference is important. But...

If you recall, the popular storyline since late last year has been that the U.S. economy is moderately improving while the world’s other major economies – Japan, China, and Europe – are rolling over. The U.S. economy would power through. Moreover, stock prices had achieved a permanently high plateau.

WASHINGTON (AP) -- Federal Reserve Chair Janet Yellen is stressing the need to review the unconventional monetary policies that central banks around the world deployed in response to the 2008 global financial crisis. She said Thursday that the post-crisis period offers policymakers an opportunity to assess the effectiveness of the tools and better understand the impact of new regulation. "Policymakers have to carefully weigh the advantages and disadvantages of alternative monetary implementation frameworks in the presence of new policy tools," Yellen said in remarks at a two-day research conference sponsored by the Fed. Policymakers should also be "mindful of new...

As central planners the world over grapple with the effective "lower bound" that's imposed by the existence of physical banknotes, there’s been no shortage of calls for a ban on cash. Put simply, if you eliminate physical currency, you also eliminate the idea of a floor for depo rates. After all, if people can't withdraw paper money and stash it under the mattress, then interest rates can be as negative as the government wants them to be in order to "encourage" consumption. If, for instance, you’re being charged 10% for saving your money, then by God you will probably spend...