"This is an impressive combination of extremely tight labour markets and extremely well-behaved labour costs, and that is the reason why the Fed (Federal Reserve) will continue moving at a very cautious pace, " said Anthony Karydakis of Bank One Capital Markets.
In World War I and World War II, it strongarmed the Fed to print Federal Reserve Notes.
State policy makers fed up with federal spending finally have a chance to do something about it.
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Wall Street investors are expecting another rate cut when the Fed's Federal Open Market Committee meets in Washington on Oct. 28-29.
In fact, the Fed was established as a result of the Panic of 1907 and the discount mechanism and rate were the only tools of monetary policy given to the Fed in the Federal Reserve Act.
Last month the Fed cut the federal funds rate (applied to money that banks lend to each other overnight to meet reserve requirements) by 1.25 percentage points, to 3%, in just eight days--the biggest one-month reduction in 25 years.
After 36 years in the Federal Reserve System, including almost 14 years as president of the Dallas Fed and a member of the Federal Open Market Committee, I'm astonished at how far this Fed has gone beyond what had been normal, prudent central bank practices.
The Fed has to lower federal funds close to zero if for no other reason than allowing banks to arbitrage money.
It was caught by unprofitable agreements with the big airlines it fed and by new federal rules mandating more safety measures like better training.
That means the Fed could reduce its federal funds target to or below the European rate, which would be a big negative for the dollar.
But during the War legislation and executive orders compelled private U.S. banks to transfer their gold coin reserves to the Fed in exchange for Federal Reserve Notes convertible into gold.
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The policy announcement was approved unanimously by the Federal Open Market Committee, the group of Fed board members in Washington and Fed regional bank presidents who set the federal funds rate.
While the Fed will be updating its forecasts at each of its Federal Open Market Committee meetings, the Fed Reality Check will measure economic results against the first set of Fed forecasts from each year.
The news was revealed in the minutes of the Fed's 13 December Federal Open Market Committee meeting.
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The Fed has already cut the federal funds rate to 1 percent, close to its lower bound of zero.
Lewis appeared concerned about shareholder lawsuits, as cited in e-mail between Fed staffers as they negotiated federal assistance for the deal.
He highlighted a major difference of opinion with regard to the thinking at the BOE, the Federal Reserve (Fed) and the European Central Bank (ECB).
Hedge fund zillionaire Paul Singer is super-mad at the Federal Reserve and Fed Chairman Ben Bernanke over inflation they have not yet quite unleashed.
The Fed cut its target on federal funds, the overnight interbank loans that form the floor rate for U.S. lending, to just 0.25%, down 75 basis points from the previous 1.0% level.
It cited the positive aspects of the US economy, i.e. its high level of flexibility, independent central bank (The Federal Reserve or Fed), and the ensuing effective monetary policy that has lent support to growth while containing inflationary pressures.
Fed Chairman Ben Bernanke will speak Friday, less than two weeks after minutes from the latest Federal Open Market Committee showed that the Fed came closer than ever to a new stimulus package during its July meeting.
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The markets could get a hint of what the Fed plans Tuesday afternoon after the Federal Open Market Committee meets.
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Hence, the Fed entered the crisis with the Federal Funds target rate at 5.25 percent and the discount rate at 6.25 percent.
Then last week, Fed Chairman Ben Bernanke hiked the federal funds rate a quarter point and wrapped it in a gauze of happy talk about inflation no longer being a threat.
The Fed said it was cutting the federal funds rate, the interest that banks charge each other on overnight loans, to 3.5 percent, down by three-fourths of a percentage point from 4.25 percent.
If the Fed instead had refused to buy federal debt, interest rates, and therefore the annual cost of servicing the gargantuan federal debt, probably would have soared, thereby making it much more difficult politically for Congress and the White House to continue adding over a trillion dollars of debt per year.
The Fed allocates the capital to the regional Federal Reserve Banks across the country.
The Fed's policymaking body, the Federal Open Market Committee, is due to meet again on November 6th.
Also that day, Fed Chairman Ben Bernanke, Fed board member Sarah Bloom Raskin and Federal Deposit Insurance Corp.
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Bank funds held in term deposits at the Fed would not be available for the federal funds market.
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