Tag: Janet Yellen

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Debt Ceiling: Secretary Yellen Says the Sky is Falling

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the staff of the Ridgewood blog

Ridgewood NJ, according to Quantitative Easing Janet Yellen ,and her media supporters , the sky is falling and there’s one month left for Republicans to relent on their refusal to raise the debt limit (so the US can pay its existing bills) unless the White House meets their demands (future cuts that will likely slash climate, education and social funding). Now, it turns out there may only be seven days left. President Joe Biden invited top congressional leaders for a meeting on the matter, but fear in markets has been rising for some time now, with yields on Treasury bills for early June soaring. Democrats are already looking at some radical options to keep the world’s largest economy from defaulting.

Continue reading Debt Ceiling: Secretary Yellen Says the Sky is Falling

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The Fed Is Freaked Out about the Financial Markets

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by LARRY KUDLOW
January 29, 2016 7:30 PM

Because it is completely misreading the situation. Early in the new year, on Sunday, January 3, Federal Reserve vice chair Stanley Fischer delivered a hawkish speech to the American Economic Association.

Completely misreading the economy, which is woefully weak while inflation is virtually nil, Fischer strongly hinted that the Fed would be raising its target rate by a quarter of a percent every quarter for the next three years.

The next day the S&P 500 dropped 1.5 percent. In the week that followed, the broad index fell 6 percent. The week after that it fell over 2 percent. During that two-week period, the Dow Jones dropped 1,437 points.

The dollar went up. Oil plunged 21 percent. Raw-material commodities dropped. And credit risk spreads in the high-yield junk market rose substantially. Actually, it was a global event, as stock markets around the world plunged. Utter chaos.

Read more at: https://www.nationalreview.com/article/430532/federal-reserve-and-stock-market

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Talk of Fed ‘policy error’ grows

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Robin Wigglesworth

Gathering for the first time after their epoch-ending decision to raise interest rates in December, the backdrop couldn’t be more different for Federal Reserve policy officials.

The long-awaited rate increase went smoothly, but simmering concerns over China, the global economy as a whole, deflating commodities and financial market valuations have since risen to the fore. Even fund managers that were relaxed about slightly tighter monetary policy last month are now wondering whether that was complacent.

“It is reasonable for investors to wonder whether Fed’s December rate hike was a policy error,” admits Bob Michele, chief investment officer of JPMorgan Asset Management. “Historically the Fed has raised rates because either growth or inflation was uncomfortably high. This time is different — growth is slow; wage growth is limited; deflation is being imported.”

Perhaps most of all, many investors now fret that they are operating without a safety net they had grown attached to during the post-financial crisis era.

https://www.ft.com/intl/cms/s/0/fcb4202a-c04d-11e5-846f-79b0e3d20eaf.html#axzz3yOZYWeNT

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Debt distress level at highest since recession

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Matt Krantz, USA TODAY7:31 a.m. EST December 28, 2015

Higher interest rates are about to hit companies – just when many are ill prepared to handle them.

The Federal Reserve this month took interest rates up for the first time in nearly a decade – ending the days of free money. It might take a few years for higher rates to hit companies – as they look to refinance debt. But the troubling part is many companies aren’t in great shape to eat the higher costs.

The number of companies with the lowest credit ratings and negative outlooks jumped to 195 in December, the highest level since March 2010, says Standard & Poor’s. The biggest culprit for the jump in these so-called “weakest links” is the oil and gas sector, which accounts for 34 of them. But financial companies are close behind, representing 33 of the weakest links, says S&P.

 

https://www.usatoday.com/story/money/markets/2015/12/28/debt-distress-level-recession/77882786/

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Congressman: Fed’s Rate Policy ‘Absolutely’ Helps the Obama Administration

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House Republicans frustrated Obama hasn’t appointed vice chair of supervision for Fed

BY: Ali Meyer
November 5, 2015 4:35 pm

The Federal Reserve’s zero-interest rate policy “absolutely” helps the Obama administration, Rep. Sean Duffy (R., Wis.) told the Washington Free Beacon on Wednesday.

“Whether that’s the sole intent, I can’t get in the mind of Chair Yellen,” Duffy said. “Does it help the Obama administration? Absolutely.”

“But monetary policy only goes so far,” he said. “At some point we have to get the fiscal policy right and we get stopped at every turn when we try to reform our tax code with this administration. It definitely has a benefit, but I don’t know if that’s the sole intent of Ms. Yellen.”

The House Financial Services Committee, on which Duffy serves, discussed at a hearing Wednesday the Fed’s lack of a vice chair of supervision. This position was created by the Dodd-Frank Act to keep the Federal Reserve accountable to Congress, and it has been more than 1,900days since President Obama has been required to appoint someone to fill it.

By keeping interest rates near zero, the Federal Reserve allows the government to continue to finance its debt without worrying about paying high interest on that debt. “The ultra-low interest rates on Treasury debt, with the three-month T-Bill rate now at zero, have allowed the federal government to act as if deficit financing is a free lunch,” explains James Dorn, a fellow specializing in monetary policy at the Cato Institute.

“It’s certainly propping up part of the economy,” said Rep. Scott Garrett (R., N.J.). “And that was the testimony of Secretary Lew and [Chair] Yellen, saying that we see higher prices in the commodities and also on the street as well. And to the extent that this endures to the benefit of this administration, that they’re able to say as they did yesterday in the hearing that things are just going well in the economy and people are profitable – sure.”

https://freebeacon.com/issues/congressman-feds-rate-policy-absolutely-helps-the-obama-administration/

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US STOCKS SLUMP AS INVESTORS MULL FED’S RATE DECISION

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BY BERNARD CONDON
AP BUSINESS WRITER

NEW YORK (AP) — U.S. stocks dropped in early afternoon trading Friday a day after the Federal Reserve held off raising interest rates. Investors interpreted the Fed’s decision as a signal that the global economy is weak. Bonds rose and the price of oil fell, pushing down energy stocks. Financial stocks, which would benefit from higher rates, also dropped.

KEEPING SCORE: The Dow Jones industrial average dropped 254 points, or 1.5 percent, to 16,419 as of 2:17 p.m. Eastern time. The Standard & Poor’s 500 fell 25 points, or 1.5 percent, to 1,964 and the Nasdaq composite declined 55 points, or 1.1 percent, to 4,838.

THE FED: The Federal Reserve decided Thursday to keep interest rates at record lows, citing low inflation, weakness in the global economy and unsettled financial markets. Investors appear to have interpreted the decision to mean that the Fed thinks the slowdown in China and other emerging markets is signaling a much weaker global economy. Some economists and investors had predicted that Fed policymakers would lift rates by a quarter of a percentage point. The Fed meets again next month and in December.

THE QUOTE: “If growth in the strongest economy – the United States – isn’t strong enough to raise rates even a quarter of point, what does that say about the prospects for global growth?” said Bill Strazzullo, chief strategist at market research firm Bell Curve Trading.

https://hosted.ap.org/dynamic/stories/F/FINANCIAL_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-09-18-09-02-44

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At least 113 staffers at U.S. Fed earn more than Yellen

U.S. Federal Reserve Board chair Janet Yellen holds a news conference in Washington

At least 113 staffers at U.S. Fed earn more than Yellen
By Michael Flaherty

WASHINGTON Fri Oct 17, 2014 10:08am EDT

(Reuters) – The top 113 earners among staff at the Federal Reserve’s Washington headquarters make an average of $246,506 per year, excluding bonuses and other benefits – more than Fed Chair Janet Yellen and nearly double the normal top government rate.

Yellen, whose salary is set by Congress, earns $201,700 a year.

The details on Fed pay were provided to Reuters in response to a Freedom of Information Act request for data on all employees of the U.S. central bank’s board whose salaries outstrip $130,810, which is the top of the government’s pay scale in most areas.

However, the central bank only provided salaries for staff who make at least $225,000 a year, with some exceptions. It is the first time the list has been made public.

Republicans in the U.S. House of Representatives have sponsored a bill that would require the Fed to divulge that information publicly.

Supporters of the Fed say the world’s leading central bank needs top talent, and note that its expenses are not covered by taxpayers, but by the income it earns on securities it holds. Critics, however, think the Fed has too much discretion.

“It certainly bolsters the case for more oversight,” said Maggie Seidel, a spokeswoman for New Jersey Republican Scott Garrett, a co-sponsor of the bill. ( https://1.usa.gov/ZD7VXz )

https://www.reuters.com/article/2014/10/17/us-usa-fed-pay-idUSKCN0I60A420141017

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In Senate race to watch, Jeffrey Bell is running against Janet Yellen

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In Senate race to watch, Jeffrey Bell is running against Janet Yellen

Why isn’t the National Republican Senatorial Campaign Committee coming in for Jeffrey Bell in New Jersey? He’s in a remarkable political fight, running surprisingly close to the incumbent, Cory Booker, despite having zilch in his campaign account. Yet he can’t get his phone calls returned by the national GOP. This is all the more amazing because Mr. Bell is framing a national issue — the failure of the Federal Reserve to create jobs. It’s almost as if Bell’s real opponent were not the glad-handing Booker but Janet Yellen, the Fed chairman. (Lipsky/The New York Post)

https://www.nysun.com/new-york/in-senate-race-to-watch-brjeffrey-bell-is-running/88806/

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Gold Dollars, Rule Dollars, And Yellen Dollars

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vampires react to sunlight

Gold Dollars, Rule Dollars, And Yellen Dollars

On July 7, Congressmen Bill Huizenga and Scott Garrett introduced H.R. 5018, the “Federal Reserve Accountability and Transparency Act of 2014.”  H.R. 5018 would mandate that the Fed articulate a rule for conducting monetary policy.  It would further require that the Fed report to Congress twice a year and compare the actual results with both their chosen rule and with the “Taylor Rule,” which was developed by Stanford economist John B. Taylor in 1992.

Both the Fed itself and progressive economists have reacted to this very mild piece of reform legislation in the way that vampires react to sunlight.  They don’t like it one bit.

During her testimony before the House Financial Services Committee on July 16, Fed Chairman Janet Yellen argued that it would be a “grave mistake” for Congress to adopt legislation constraining the Fed’s management of monetary policy, because this would impair the Fed’s ability to manage the economy, and its ability to respond to financial crises.  She said that such a law “…would essentially undermine central bank independence.”

https://www.forbes.com/sites/louiswoodhill/2014/07/24/gold-dollars-rule-dollars-and-yellen-dollars/

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Billionaire Warns: Yellen Collapse ‘Will Be Unlike Any Other’

Inside The International Monetary Fund's Rethinking Macro Policy Conference

Federal Reserve Chair Janet Yellen

Billionaire Warns: Yellen Collapse ‘Will Be Unlike Any Other’

Another horrific stock market crash is coming, and the next bust will be “unlike any other” we have seen.

That’s the message from Jeremy Grantham, co-founder and chief investment strategist of GMO, a Boston-based firm with $117 billion in assets under management. 

Grantham pulls no punches when assigning responsibility for the coming financial carnage. In a recent interview with The New York Times, he calls Federal Reserve Chair Janet Yellen “ignorant” and says the Federal Reserve all but killed the economic recovery. 

Grimly, he adds, “We have never had this before. It’s going to be very painful for investors.” 

Grantham isn’t the only one worried about a market collapse. 

“We have no right to be surprised by a severe and imminent stock market crash,” explains Mark Spitznagel, a hedge fund manager who is notorious for his hugely profitable billion-dollar bet on the 2008 crisis. “In fact, we must absolutely expect it.” 

Billion-dollar investor Warren Buffett is rumored to be preparing for a crash as well. The “Warren Buffett Indicator,” also known as the “Total-Market-Cap to GDP Ratio,” is breaching sell-alert status and a collapse may happen at any moment. 

So with an inevitable crash looming, what are Main Street investors to do? 

Read Latest Breaking News from Newsmax.com https://www.moneynews.com/MKTNews/Billionaire-yellen-market-collapse/2014/07/21/id/583962#ixzz38BclatrA