Despite the monetary stimulus from the Federal Reserve and the fiscal stimulus from the federal government, Weiss foresees a long, drawn-out bear market similar to the one Japan has been in since late 1989.
It seems certain that the Federal Reserve will continue to accompany fiscal stimulus with the monetary equivalent in the form of near-zero interest rates and further quantitative easing.
However, the Federal Reserve is not a repair shop for broken fiscal, trade or regulatory policies.
C. about the so-called fiscal cliff and for any clues on future monetary policy from Federal Reserve officials.
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Outrage should be at the federal government (and The Federal Reserve) on almost every issue that deals with a fiscal nature.
The combination of such irresponsible fiscal and monetary policies threatens to erode confidence in the dollar as a reserve currency.
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These concerns, plus thoughts that the U.S. Federal Reserve has left the door open to another potential round of fiscal stimulus if the U.S. economy falters, pushed gold prices to record levels this week.
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These constraints set up a situation where the Federal Reserve and Treasury must consider the ramifications of their loose monetary and fiscal policies on the rest of the world.
Ms Lagarde endorsed quantitative easing by central banks such as the US Federal Reserve and Bank of Japan, but said that rich economies should use fiscal policy more aggressively so there was less pressure for interest rates to stay low.
In more sober terms, Federal Reserve Chairman Ben Bernanke delivered a warning about the consequences of congressional paralysis for fiscal issues.
Its favourable demographic trends mean its fiscal day of reckoning is further off than Europe's and the dollar's reserve-currency status provides manoeuvring room.
The value of the U.S. dollar, and its effect on the price of gold, for 2013 will be largely influenced by the upcoming second round of Fiscal Cliff decisions related to spending cuts, the impending Debt Ceiling decision and further Federal Reserve actions related to interest rates in response to the ongoing, sluggish economic recovery.
Slower core inflation has allowed the Reserve Bank of India to begin easing monetary policy, despite its objection to the fiscal stance.
With rumors over the future of Ben Bernanke at the Federal Reserve dissipating, and investors preparing for another all-out political battle on the fiscal cliff and the debt ceiling, yields could drop even further, to 1.5% or below, according to Barclays.
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While the economy is growing at a rate of 1.6%, our fiscal restraint measures will reduce GDP by 1.75% in 2013 explained William Dudley, President of the Federal Reserve Bank of New York, in a speech given on March 25th.
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