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WASHINGTON (MarketWatch) – The Federal Reserve on Tuesday warned it was concerned about the potential outbreak of deflation, laying the groundwork for buying government bonds at future meetings. The warning about deflation came as the Fed held interest rates steady at the record low near-zero for the 20th consecutive month. In a statement, the Fed said that inflation was at levels somewhat below the level consistent with stable prices. “Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability,” the...

WASHINGTON (Reuters) - With official interest rates near zero and the Federal Reserve unable to cut them any further, every policy meeting by definition brings the central bank one step closer to an eventual monetary tightening. As signs of firmer U.S. growth become more widespread, investors are getting antsy about anticipating the Fed's next move, a guessing game sure to gather momentum as the Federal Open Market Committee holds a two-day meeting this week. Much of the discussion in the markets now centers upon how soon the Fed will abandon a commitment to keep rates really low for an "extended...

Any decision by the Federal Reserve to end its policy of ultra-low interest rates would come in response to economic data and not according to any predetermined schedule, leaders of the central bank made clear in minutes of their last meeting released Tuesday. For more than a year, the Fed has said it expects to leave its target interest rate "exceptionally low" for "an extended period." But the length of that extended period has been up for debate, and some policymakers have said it means that rates will stay near zero for at least six more months. With the release...

With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt. Recent events in Europe, where Greece and other nations with large, unsustainable deficits like the United States are having increasing trouble selling their debt to investors, show that the U.S. is vulnerable to a sudden reversal of fortunes that would force taxpayers to pay higher interest rates on the debt, Mr. Bernanke...

<p>WASHINGTON (MarketWatch) -- President Barack Obama said Friday he's confident that Ben Bernanke will win a second term as chairman of the Federal Reserve Board, despite some concern that Democrats may withdraw their support for Bernanke -- one of the principal architects of the government's bank-bailout plan.</p>

Commentary: Rates to stay low as long as unemployment stays highWASHINGTON (MarketWatch) -- The Federal Reserve isn't going anywhere until the unemployment rate drops. In answer to all those who are clamoring for the central bank to begin raising interest rates or to at least explain when higher rates might come, the Federal Open Market Committee gave a simple response on Wednesday: Show us the jobs. Rates will stay "exceptionally low" as long as the unemployment rate is rising and inflation trends are subdued, the FOMC said. After its two-day meeting ended on Wednesday, the FOMC made essentially no changes...

The world is suffering through the worst financial crisis since the 1930s, a crisis that has precipitated a sharp downturn in the global economy. Its fundamental causes remain in dispute. In my view, however, it is impossible to understand this crisis without reference to the global imbalances in trade and capital flows that began in the latter half of the 1990s. In the simplest terms, these imbalances reflected a chronic lack of saving relative to investment in the United States and some other industrial countries, combined with an extraordinary increase in saving relative to investment in many emerging market nations....

WASHINGTON (CNN) — Two top enate Republicans said Sunday that banks shouldn't be able to count on any more bailout money — and that the federal government should let some of them fail rather than distribute further funds to keep them afloat. . . . . . Former GOP presidential candidate John McCain told Fox News Sunday that he did not think President Obama "made the hard decision, and that is to let these banks fail." He did not call for nationalization of troubled financial institutions, which many Republicans oppose, but said their assets should be sold. "Unfortunately, the shareholders...

WASHINGTON (MarketWatch) -- Federal Reserve Board Chairman Ben Bernanke stressed Tuesday that major financial institutions would not be allowed to fail given the fragile state of financial markets and the global economy. In a speech in Washington, Bernanke repeated that a sustainable economic recovery will "remain out of reach" until the banking sector is stabilized. A recovery later this year is not out of the question, Bernanke said. ************************* 'It was the...collapse of banks and other institutions in late 1930 and early 1931 that made the Great Depression great.' — Fed Chairman Ben Bernanke

Federal Reserve Chairman Ben Bernanke said Monday that further interest-rate cuts are "certainly feasible," but he warned there are limits to how much such action would revive an economy likely to stay weak well into next year.The Fed's key interest rate now stands at 1 percent, a level seen only once before in the last half-century. To help lift the country out of a recession that started in December of last year, many economists predict Bernanke and his colleagues will drop the rate again at their next meeting on Dec. 15-16.Bernanke, in prepared remarks to business leaders in Austin, Texas,...

Fed policymakers will take 'whatever steps necessary'WASHINGTON (MarketWatch) - Federal Reserve policymakers now expect the U.S. economy to contract for as much as a year, with the risk that the slowdown could persist for even longer, according to edited minutes of a closed-door meeting of the Federal Open Market Committee on Oct. 28 and 29. The Fed governors and Fed bank presidents "generally expected the economy to contract moderately in the second half of 2008 and the first half of 2009, and agreed that the downside risks to growth had increased," the minutes said. Without using the word, the Fed...

The Brazilian Central Bank is negotiating possible loans from the U.S. Federal Reserve with the intention of using the money to help stabilize the local foreign exchange market, local newspaper Folha de S. Paulo reported Thursday. The newspaper did not reveal its sources. Contacted by Dow Jones Newswires, central bank officials were not immediately available for comment. According to the newspaper, the intention of the central bank is to use loan dollars provided by the Fed in order to inject dollars into the local forex market, and thereby preserve Brazil's foreign currency reserves. Brazil's foreign currency reserves totaled $201.5 billion...

For Immediate ReleaseOffice of the Press SecretaryOctober 11, 2008 President's Radio Address   President's Radio Address  Audio  En Español       In Focus: EconomyTHE PRESIDENT: Good morning. Over the past few days, we have witnessed a startling drop in the stock market -- much of it driven by uncertainty and fear. Many Americans have serious concerns about their economic well-being. Here's what the American people need to know: The United States government is acting -- and will continue to act -- to resolve this crisis and restore stability to our markets. The Federal government has a comprehensive strategy and the tools necessary to...

The Goldman Sachs Group GS 129.80, +21.80, +20.2%) today announced that it will become the fourth largest Bank Holding Company and will be regulated by the Federal Reserve.

Treasury chief wants Congress to move quickly on giving Fed new powers WASHINGTON (MarketWatch) -- Treasury Secretary Henry Paulson isn't too pleased with Washington's response to the financial-market crisis.In a speech to be delivered Thursday to the Women in Housing and Finance organization, Paulson will call on Congress to give the Federal Reserve authority to stabilize the financial system when it comes under threat. Video: Paulson talks change Treasury Secretary Henry Paulson calls for changes in the regulation of the U.S. financial market after the collapse of investment bank Bear Stearns. (June 19) "Our nation has come to expect the...

The securities backing a $29 billion Fed loan to Bear Stearns Cos. consist primarily of “mortgage backed securities and related hedge investments,” the Treasury Department says. ..snip... Treasury also supplied a letter from Secretary Henry Paulson to Federal Reserve Bank of New York President Timothy Geithner, dated March 17, saying, “On behalf of the Department of Treasury, I support this action as appropriate and in the government’s interest, and acknowledge that if any loss arises out of the special facility extended by the FRBNY to JPMCB [J.P. Morgan Chase Bank], the loss will be treated by the FRBNY as an...

The Federal Reserve's rescue has failed By Ambrose Evans-Pritchard, International Business Editor Last Updated: 11:10am GMT 03/03/2008 Have your say Read comments The verdict is in. The Fed's emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation. Much more drastic action will be needed. Read more from Ambrose Evans-Pritchard 'Ninja' loans explode on sub-prime frontline Yields on two-year US Treasuries plummeted to 1.63pc on Friday in a flight to safety, foretelling financial winter. advertisement The debt markets are freezing ever deeper, a full eight months into the crunch. Contagion is spreading into...

WASHINGTON (MarketWatch) -- The Federal Reserve's Sept. 18 interest-rate cut of half a percentage point may be enough to keep the U.S. economy from sinking as a result of the financial markets' recent turmoil, Fed vice-chairman Donald Kohn said Friday. 'It is too early to tell what effect financial market turmoil is having on household and business spending, though very preliminary and partial information suggest that thus far the effects seem to be limited.' — Donald Kohn, Fed vice chairman

Stays away from topic of financial market turmoil In a speech in Berlin on Tuesday, Bernanke did not address the current financial market turmoil or credit crunch. His comments stuck to the troubling issue of the large U.S. current account gap and corresponding surpluses in China and oil-exporting countries. Many economists and the International Monetary Fund have worried for years that there might be a sudden, sharp decline in foreign appetite for U.S. dollars, requiring higher U.S. interest rates to attract the necessary foreign capital to fund American's spendthrift ways. "What are the prospects for a gradual and orderly rebalancing...

Labor Department reports less-than-expected productivity in the spring NEW YORK (MarketWatch) - Stock prices pulled higher Tuesday, with Moody's Investors Service helping to soothe investors' worries about subprime loans ahead of the Federal Reserve's much-anticipated rate decision and accompanying statement in the afternoon."Business line diversification has been an important strength allowing the five U.S. investment banks to manage through the turmoil within the subprime sector," reads the Moody's commentary.