Tags: Fed, QE-finity, The Great Taper and other myths and legends, unsurprising surprises
Yea, we know: This was it. This was going to be the Fed Open Market Committee meeting that would mark the beginning of the end of QE3. Everyone (well, almost everyone) was sure of it. Until, like all of the previous meetings that were supposed to mark the beginning of the end, it didn’t.
The Federal Reserve postponed any retreat from its long-running stimulus campaign Wednesday, saying that it would continue to buy $85 billion a month in bonds to encourage job creation and economic growth.
As Congressional Republicans and the White House hurtle toward another showdown over federal spending, the Fed said it was concerned that fiscal policy once again “is restraining economic growth,” threatening to undermine what the Fed had described just months ago as a recovery gaining strength….
“The tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and the labor market,” it said in a statement released after a regular two-day meeting of its policy-making committee.
The decision, an apparent victory for the Fed’s chairman, Ben S. Bernanke, and his allies who have argued for the benefits of asset purchases, was supported by all but one member of the Federal Open Market Committee. Esther George, president of the Federal Reserve Bank of Kansas City, dissented as she has at each previous meeting this year, citing concerns about inflation and financial stability.
Predictably, this followed: Read more »
Tags: Fed, Gina Martin Adams, Goldman Sachs, QE3, small sample sizes, taper
Sure, we’ve heard it before, but this time 31 of 47 people who bothered to answer their phone/e-mail are pretty sure that next week’s Fed meeting will be the Fed meeting we’ve all been waiting and waiting and waiting for. Read more »
Tags: Fed, hold your horses, James Bullard, QE3
The St. Louis Fed President and QE3-ophile‘s story is there’s still not nearly enough data to justify the dreaded taper, and he’s sticking to it. Do not ask him to be more specific for at least a few more months—or quarters. Read more »
Tags: C-town, Fed, QE3, Richard Fisher, Sandra Pianalto
The Dallas Fed president adds one hell of a caveat to when he thinks the FOMC should start slowing bond purchases (formerly thought to be the day before the earliest time possible), a program he previously accused of:
- debasing the dollar;
- having potentially “tragic” consequences;
- “building up kindling for speculation and eventually, a massive shipboard fire of inflation;
- and, of course, “the ruination of our economy and lifestyle.”
“We should begin reducing bond purchases in September, as long as we don’t see a clear worsening of the economic data,” the president of the Federal Reserve Bank of Dallas told German business newspaper Handelsblatt.
Fisher’s new (opportunistic) dovishness comes as his colleagues (most of them, anyway) seem to at last be coming around to his side. Although one of them is getting the hell out before she has to deal with the fallout that will result. Read more »
Tags: all good things, Charles Evans, Fed, QE3, Richard Fisher
When Richard Fisher says that the Fed is getting awfully close to beginning to end his hated QE3, everyone shrugs their shoulders and says, “the Dallas Fed president is up to it again.”
When Chicago Fed chief Charles Evans says the same thing, the reaction is somewhat different. Read more »