Free Republic

Concerns about the end of QE2 have put downward pressure on equities and bond yields. We think this will ease. We expect the consensus outlook to improve as it did in the face of Y2K.  Like the June 30 end of QE2, Y2K crash warnings had a date certain, January 1, 2000, to worry about, causing months of hand-wringing due to the uncertainty.  Equities ended up rallying over 15% in the final three months of 1999 and went higher in following months.  We expect a substantial flow from bonds to equities in coming months as the growth outlook improves, inflation rises...

WASHINGTON (MarketWatch) - The Federal Reserve's Federal Open Market Committee on Wednesday left its key interest rate at an historic low range of 0% to 0.25% and said its $600 billion bond-buying program would end as scheduled on June 30. Inflation has picked up and the Fed now says the economic recovery is proceeding at "a moderate pace," but the central bank still said the inflation pickup will be temporary and the jobs market is still a concern. The decisions were widely expected. The FOMC made only few changes to the language of the policy statement it issued in March...

NEW YORK, March 25 – With the economy on firmer footing the Federal Reserve Bank is unlikely to extend its bond-buying stimulus program beyond a planned $600 billion, several top Fed officials said on Friday. Members of the more hawkish wing of the Fed went further, with Philadelphia Fed Bank President Charles Plosser saying the U.S. central bank will have to reverse its easy money policy in the "not-too-distant future" to avoid sowing the seeds of inflation. The Fed has kept short-term rates near zero since December 2008 and has bought more than $2 trillion in long-term securities to push...

Federal Reserve reports record profitBy Peter Schroeder - 03/22/11 12:12 PM ET The Federal Reserve turned a record $81.7 billion profit in 2010, up 53 percent from 2009, the central bank reported Tuesday. The vast majority of the Fed's profit — $79.3 billion — will be turned over to the Treasury Department, with the rest being paid out to member banks in dividends. A substantial chunk of that profit came from increased interest income from the $1 trillion in mortgage-backed securities the Fed purchased during the financial crisis to help stabilize the housing market. The Fed made $24.4 billion more...

Decades of autocratic government and a lack of free elections are, of course, the main drivers of the political upheaval in Egypt. But did the sinking dollar and skyrocketing food prices trigger the massive unrest now occurring in Egypt — or the greater Arab world for that matter? In addition to Egypt, the people have taken to the streets to varying degrees in Algeria, Jordan, Libya, Morocco and Yemen. Local food riots have even broken out in rural China and other Asian locales. While the mainstream media focus on the political aspects of this turmoil, they are overlooking the impact...

<p>As we know, massive popular unrest has broken out against autocratic governments in North Africa and the Arab world. Egypt is the biggest story. But to varying degrees, the people have taken to the streets in Algeria, Jordan, Libya, Morocco, and Yemen.</p>

Federal Reserve Board Chairman Ben Bernanke said Thursday that a controversial $600 billion bond buying plan has contributed to a stronger stock market. "Our policies have contributed to a stronger stock market just as they did in March 2009 when we did the first iteration of this program," Bernanke said at a Federal Deposit Insurance Corp. forum on small businesses. "A stronger economy helps small businesses more than larger businesses. Interest rates are higher but that's mostly because the news is better. It has responded to a stronger economy and better expectations." The $600 billion bond buying plan follows a...

Ben Bernanke may or may not succeed in saving the economy, but at least he has the courage to try — and the honesty to tell the truth. The same cannot be said of our elected officials. Congress is buried under a crushing surplus of cynicism, while the White House seems paralyzed by a deficit of courage. An expert on the Great Depression, Bernanke is determined not to be the Federal Reserve chairman who allows the nation to plummet into Great Depression II. Since our political leaders can't be bothered to do what urgently needs to be done — stimulate...

Is the beast of deflation crouching outside our door? Could this be the real reason behind the Federal Reserve's recent injection of $600 billion into the economy? Despite the logic of much of the criticism being aimed at the Fed, it may be doing what it has to do to keep the country from spiraling down into a deeper recession. In the midst of what amounts to a virtual economic war with some of our trading partners, it's important for us to understand exactly what is at risk and what the Fed is up to. First, the risk: Deflation is...

The Federal Reserve has already injected hundreds of billions of new dollars into the economy since the recession started. Normally, when the government prints up more money, dollars are worth less and that is what we call inflation. But inflation has been surprisingly low. One measure of the money supply, M1, which includes currency as well as checking accounts, soared by 26 percent between August 2008 and September this year. The amount of currency more than doubled. But prices barely changed. As Fed Chairman Ben Bernanke goes forward with plans to print up another $880 billion, someone has to ask...

Fed chairman Ben Bernanke's big speech... leaves U.S. policymakers off the hook and takes their focus further away from the free-market reforms within their control to make -- the policy changes that would do much more to save what's left of the U.S. economy than anything China might do. Bernanke would have been more constructive taking direct and sustained aim at U.S. policymakers in both parties -- it's their bad policy moves and avoidance of tough decisions over more than 30 years that's responsible for America's economic underperformance. The metaphor that comes to mind is of an overweight runner blaming...

Ben Bernanke is emerging as a high-profile scapegoat as critics ridicule his new "quantitative easing" policy. Charlie Gasparino on why mocking the non-partisan Fed chair is bad for America. __________________________________________________________________________________________________________________________________________________________________________ Here's how you know Ben Bernanke, the mild-mannered chairman of the Federal Reserve, a scholar of the Great Depression once considered a sage for saving the banking system during the 2008 bank meltdown, has suddenly found himself a target of ridicule lumped in with the financial morons and evildoers like Dick Fuld, Lloyd Blankfein and the rest of the fat cats of Wall Street. Go to YouTube.com, and one of...

There's something about quantitative easing that bothers just about everyone - including, believe it or not, Fed chief Ben Bernanke. But in contrast to his many critics, Bernanke's problem lies not with the policy itself, in which the Federal Reserve has pledged to buy $600 billion worth of Treasury bonds over eight months in its latest bid to bring down interest rates and stimulate the economy. What's in a name? No, Bernanke's beef is that what the Fed is doing isn't properly called quantitative easing, as he reminded everyone in his speech Friday. Incidentally, in my view, the use of...

If you think our economy is in bad shape now, just wait. To be sure, economic prospects for jobs and growth already are bleak, and the Obama administration has increased the national debt in less than two years from over $10.632 trillion in January 2009 to $13.561 trillion in September 2010, resulting in a record 30% increase in public debt. But fear not. Some of our brightest leaders have got the perfect solution to all these problems: "Charles Evans, president of the Federal Reserve Bank of Chicago, called for the Fed to do more to charge up the economy, including...

... monetary policy has suddenly become a turkey. In ordinary times, nobody has much of an opinion on monetary policy -- beyond Fed staffers, wonks and professional bond investors. For heated discussion on the finer points, you have to tune into CNBC or sift through impenetrable papers at academic conferences. But these days, monetary policy is lighting up Facebook and talk radio. In a recent speech, Sarah Palin showed she's a Mama Grizzly Bear, not a Mama Grizzly Bull. "All this pump priming will come at a serious price," she said, complaining about Federal Reserve Chairman Ben Bernanke's latest plans...

NEW YORK (CNNMoney.com) -- U.S. stock markets posted slight gains at the start of a busy Wednesday, after a big Republican victory in the midterm election and ahead of a key Federal Reserve meeting. The Dow Jones industrial average (INDU) added 26 points, or 0.2%, and the S&P 500 (SPX) gained 2 points, or 0.2%. The tech-heavy Nasdaq (COMP) rose 2 points, or 0.1%. Stocks closed higher Tuesday after interest rate hikes from the central banks of Australia and India sparked an early rally. But the market traded in a narrow range for most of the day as investors remained...