Federal Reserve

The FOMC Tapers, But That's Not All!

In a move that has been discussed and anticipated for months, the Federal Reserve's Federal Open Market Committee announced that it would slightly scale back its current quantitative easing program (QE3). Specifically, it would slow its purchases of longer-term Treasury and mortgage-backed securities by $5 billion per month each, reducing the total monthly purchase from $85 billion to $75 billion.

As the Fed Meets, CRFB Quantifies Interest Rate Risk Facing the Budget

Beginning tomorrow, the Federal Open Market Committee, the Fed's interest rate setting and deliberative body that meets eight times a year -- will meet for two days to make decisions about the future path of U.S. monetary policy. In particular, many are looking to see whether the Fed will begin a "taper" and slow the rate of asset purchases, signaling the beginning of an unwind of the Fed's expanded balance sheet.

Chairman Bernanke Testifies Before the Joint Economic Committee

This morning, Federal Reserve Chairman Ben Bernanke testified before the Joint Economic Committee regarding the current economic climate. He noted that the economy has begun to show signs of life, attributing the accelerating pace of GDP growth to gradual improvements in credit conditions and the housing market. He also argued that the Fed should continue its quantitative easing at its current pace until the labor market improves sufficiently. 

Federal Reserve Makes $88.9 Billion in Profit

Yesterday, the Federal Reserve announced in a preliminary estimate that it had made a profit in 2012 and transferred $88.9 billion to the Treasury. This is a new high for the Fed, up from the previous high of $79 billion in 2010, and $77 billion last year.

QE 3.1: The Fed Gets Specific

In September, the Federal Open Market Committee (FOMC) announced a third round of quantitative easing, consisting of purchases of mortgage-backed securities and long-term Treasuries. QE3 represented a break from previous rounds of easing because it did not involve an end date for the purchases. With that modification, there was some speculation that the FOMC would also set inflation and unemployment thresholds after which, if reached, the Fed would wind down its easing policy.

QE3 Is on the Way

After months of speculation and anticipation, the Federal Open Market Committee decided to undertake a third round of quantitative easing. The centerpiece of QE will be the purchase of more mortgage-backed securities at a pace of $40 billion per month.

Bernanke Once Again Warns Congress on the Fiscal Cliff

Federal Reserve Chairman Ben Bernanke addressed Senate Finance Committee on Tuesday and the House Finance Committee yesterday with more warnings about the fiscal cliff at the end of the year.

Chairman Bernanke Addresses the Fiscal Cliff

Federal Reserve chairman Ben Bernanke held a press conference yesterday following the conclusion of the Federal Open Market Committee meeting. Questions spanned a variety of topics including the Fed's current monetary policy stance, the economic outlook, the possible threat posed by European troubles, and Fed transparency. But one question did come up about the fiscal cliff and how the Fed would react if no action were taken. Here are his remarks:

Bernanke 'Supportive of Going Big'

Supporters of enacting a comprehensive deficit reduction plan got a boost yesterday from Federal Reserve Chairman Ben Bernanke. At a hearing with the House Budget Committee on the economic outlook, Bernanke responded to a question from Rep. Mike Simpson (R-ID) about the need for a large fiscal plan. He said the following (at the 58:45 mark of the video):

Federal Reserve Sends $77 Billion in Profits to Treasury

Yesterday, in the preliminary assessment of its 2011 balance sheet, the Federal Reserve reported that it would be sending $77 billion in 2011 profits back to the U.S. Treasury. While this is down slightly from the record high of $79 billion sent to Treasury in 2010, it is still a much larger return than in any other year in the 2000s, and more than double the average annual remittance of $36 billion over the 2000-2011 period ($28 billion average if 2010 and 2011 are excluded). 

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