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Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the Fed’s record stimulus hasn’t pushed down the real interest rate enough to meet its mandate to achieve price stability and full employment.
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Federal Reserve Bank of Chicago President Charles Evans said the U.S. job market is “doing better” thanks to record policy stimulus, while adding that he wants to see employment gains continue through the summer.
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The Federal Reserve said it will keep buying bonds at a monthly pace of $85 billion while standing ready to raise or lower purchases as economic conditions evolve.
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Debate among Federal Reserve policy makers is shifting away from the timing of a reduction in bond buying to the need to extend record stimulus as inflation cools and 11.7 million Americans remain jobless.
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Three regional Federal Reserve bank presidents said a further decline in U.S. inflation below the Fed’s 2 percent goal may signal a need for more accommodation.
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Wall Street’s biggest bond dealers see little chance the Federal Reserve will slow the pace of debt purchases designed to boost economic growth before the fourth quarter, even as policy makers face calls to curb the buying.
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Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the central bank’s low interest-rate policies, though necessary, will probably generate signs of financial instability.
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Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the Fed should do more to spur economic growth by reducing the threshold for consideration of a policy tightening to a 5.5 percent unemployment rate.
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Policy makers from the Federal Reserve and the Bank of England said they see few signs of equity price bubbles in the U.S. and the U.K., countering criticisms record stimulus is stoking excessive risk-taking.
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Gary Stern, former president of the Federal Reserve Bank of Minneapolis, said he doesn’t see an impending “inflationary disaster” as the central bank pumps money into the economy in an effort to stimulate growth.