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U.S. Economy Waist Deep In The Big Muddy Economics / US Economy Jan 28, 2012 - 02:50 AM By: Peter Schiff With its announcement this week that it will keep interest rates near zero until at least late 2014, the Federal Reserve has put another large crack into the foundations underlying the US dollar. In a misguided attempt to provide clarity and transparency, Ben Bernanke has instead laid out a simple road map for economists and investors to follow. The signposts are easily understood: the Fed will stop at nothing in pursuing its goals of creating phantom GDP growth, holding...

The Fed Is Worried -- And You Should Be Too Comstock Partners January 26, 2012The Fed is worried, and you should be too. That is the major take-away from yesterday's FOMC statement, combined with its release of updated projections and Bernanke's press conference. Despite the market's cheering of the promise of a near-zero fed funds rate until late 2014 and the prospect of QE3, the Fed is fighting a lonely battle against severe economic headwinds----and they know it. In answering a reporter's question, Bernanke made it crystal-clear that he does not believe that the recently optimistic economic releases are sustainable....

WASHINGTON – The desperation of homebuilders was a running joke among top Federal Reserve officials during the waning phase of the housing bubble in 2006, according to transcripts released Thursday. They laughed about the cars that builders were giving to buyers. They laughed about efforts to make empty homes look occupied. They laughed at a report that one builder said inventory was rising “through the roof.”

Press Release Federal Reserve Press Release Release Date: December 14, 2010 For immediate release Information received since the Federal Open Market Committee met in November confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment. Household spending is increasing at a moderate pace, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. The...

WASHINGTON (MarketWatch) -- The U.S. economy may be strengthening, but the Federal Reserve is in no rush to change its ultra-accommodative policy. Following a two-day meeting on Wednesday, the Federal Open Market Committee once again laid out its cautiously optimistic view of the economy. The economy "continued to strengthen," but the slow and fragile recovery will require exceptionally low interest rates for some time to come, the central bankers said. The statement recited the usual list of pros and cons in the economy. On the good side of the ledger: stronger growth, subdued inflation, improving labor markets, rising consumer spending...

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...

A significantly worsening economic outlook forced the Federal Reserve's hand in mid-March, leading the Federal Open Market Committee to commit to buy up to $1.25 trillion in long-term assets to goose the economy and prevent a slide into deflation, according to minutes of the March 17-18 meeting released Wednesday. The summary of the meeting indicates little debate among the FOMC members on the question of buying longer-term Treasurys, with the major disagreement coming over how much to buy. All members of the committee agreed that "substantial additional purchases of longer-term assets ... would be appropriate," the minutes said. "Members agree...

LAST WEEK I made the bold, if not downright crazy, prediction that that the Federal Reserve would not cut interest rates at the upcoming FOMC meeting on Sept. 18, despite widespread panic in credit markets. But then again, it probably seemed crazy when I said to buy stocks three weeks ago when it looked like they were going to zero. At this point stocks have recovered half their losses in this correction, and stand less than 5% below all-time highs. I still love stocks here. But as we get closer and closer to the FOMC meeting day, I'm getting more...

WASHINGTON (Reuters) - St. Louis Federal Reserve Bank President William Poole said on Wednesday financial market turmoil had not undermined the U.S. economy and there was no need for the central bank to ride to the rescue with an emergency rate cut. "It's premature to say that this upset in the market is changing the course of the economy in any fundamental way," he said in an interview with Bloomberg. "Obviously, there could be an impact, but we have to rely on some real evidence." Global stock markets have fallen sharply as investors increasingly shy away from risky assets amid...

WASHINGTON -- Prior to the recent global financial crisis, the Federal Reserve Board under Chairman Ben S. Bernanke was ready to take a subtle step toward easier money in order to stave off U.S. recession fears. Ready for approval in the immediate future was a new Federal Open Market Committee (FOMC) statement taking the central bank off neutrality and putting it on a bias for an interest rate cut. But international credit scares changed all that. The Fed and other central banks moved quickly and in unison last Friday to pump more cash into financial systems, successfully stabilizing markets made...

WASHINGTON -- U.S. Federal Reserve policy makers meeting last month were all concerned by higher core inflation, but most expected inflation to ease, according to the June 28-29 meeting minutes released Thursday. "With inflation expectations contained and unit labor costs held down by ongoing gains in productivity and modest advances in compensation, inflation was seen by most participants as likely to edge down," according to Federal Open Market Committee minutes, released after a customary three-week lag. (Full text ) The FOMC voted unanimously on June 29 to raise the federal funds rate by a quarter percentage point for 17th straight...

As the US Federal Reserve prepares for its latest decision on interest rates, most analysts predict it will announce a further rise on Thursday. With its rate-setting Open Market Committee sitting down for two days of talks, the Fed is expected to increase rates by another 0.25% to 5.25%. This would be the 17th rise in a row, putting rates at a new five-year high. Commentators point to the fact that Fed chairman Ben Bernanke has already warned that inflation is a concern. He said at the start of this month that recent increases in inflation - triggered by rising...

WE DO NOT YET KNOW enough to make a definitive estimate of the amount of time it will take to get the pipelines pumping at full capacity, all of the refineries up and running, the port operating on a normal basis, and other parts of the Gulf Coast economic structure back into pre-Katrina shape. But we know a lot more than we did in the first days after the storm.We know that, unlike the local residential sector, the nationally important economic infrastructure will recover surprisingly quickly. This reflects, at least in part, the unambiguous incentive that the private sector oil,...

Factories were chugging, cash registers were busy and jobs were growing in the late summer - fresh proof that the economy was in fine fettle before Hurricane Katrina struck the Gulf Coast, spreading death and destruction. The Federal Reserve's latest snapshot of business conditions around the country, released Wednesday, was taken before last week's hurricane. Private economists and the Congressional Budget Office predicted that fallout from the storm would cause overall economic activity to slow in the second half of this year by one-half to a full percentage point on an annualized basis. Jobs also are expected to take a...

...The U.S. expansion has been strong and steady despite the warnings of fragility, the repeated claims of a slowdown, and the fear of China (as intense as the Japan fears of the 1980s). U.S. growth has averaged a fast 3.9% pace since the initial 7.4% tax-cut-related growth celebration in the third quarter of 2003. Thanks in large part to smaller businesses, U.S. unemployment has fallen to 5.1%, with wage and salary income growing at a 10% annual rate in the revised fourth-quarter data. Beyond housing, household liquid assets have increased more than both total debt and foreign debt, helping build...

WASHINGTON, June 26 - Federal Reserve officials, who meet this week, are beginning to suspect that the perplexing decline in long-term interest rates is more than a temporary aberration. The possibility has major implications for the economy, and it creates new puzzles for Fed officials on how they should respond. On Thursday, the Fed is all but certain to raise the federal funds rate on overnight loans between banks by another quarter point, to 3.25 percent. That would be the ninth increase in the last year, and the central bank is expected to signal that it will continue to raise...

The increasing attention paid to growing U.S. current account deficits has bred nightmare scenarios of a sharp decline in the foreign-exchange value of the dollar and rising U.S. interest rates. Financial markets, by contrast, appear more sanguine. Inflation-indexed bonds in the U.S. are yielding only about 1.5% in real terms, and the IMF's estimate of the long-term world real interest rate is about 2%. Capital markets rightly estimate low current real rates of interest, though the outcome affords little comfort. Alan Greenspan has termed the fall in long-term rates in the presence of a rising federal funds rate a "conundrum."...

10:23am 04/15/05 U.S. futures markets see Fed pausing this summerBy Rex Nutting WASHINGTON (MarketWatch) -- The Federal Open Market Committee will probably raise interest rates a couple more times before pausing this summer, according to futures markets. Following stagflationary data released on Friday, the federal funds futures market at the Chicago Board of Trade was predicting a 3.43% fed funds rate in September, down from the 3.50% expected on Thursday. The market still sees quarter-point rate hikes in May and June, but there's a growing perception that the Fed will pause in either August or September. The fed funds rate...

Greenspan says deficits may easeBy Greg Robb, MarketWatch Last Update: 11:46 AM ET Feb. 4, 2005 WASHINGTON (MarketWatch) -- A confluence of market pressure and fiscal restraint may dampen the U.S. current-account deficit in the coming months, Federal Reserve Chairman Alan Greenspan said Friday. In a speech prepared for delivery Friday to a conference in London, Greenspan said market pressures "appear poised to stabilize and over the longer run possibly to decrease the U.S. current-account deficit and its attendant financing requirements." Read full text of Greenspan's remarks. He said there is growing support in Washington for cutting the federal budget...

In the fifth tightening of US monetary policy in as many meetings, Alan Greenspan and the Federal Open Market Committee (FOMC) raised the Federal Funds Rate target 25 basis points to 2.25%, as expected. More...