The Fed should "explicitly" say it will keep rates near zero until the economy is within a year of reaching Fed goals, a policymaker said.» Read More
Senate Finance Committee Chairman Christopher Dodd told CNBC he asked the Bush administration to lift the portfolio caps on housing finance giants Fannie Mae and Freddie Mac, but Treasury Secretary Henry Paulson expressed reluctance to do so.
Stock traders will be looking over their shoulders at the credit markets as a furious flight to quality into Treasuries keeps the pressure on stocks prices. For now, stock futures are higher and look set for a firmer opening.
Senate Banking Chairman Christopher Dodd told CNBC he believes the Federal Reserve was lax in its responsibilities by not preventing the surge of subprime mortgage loans. Dodd also said he will meet with Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson on Tuesday morning.
Investors may soon get what they are clamoring for: a cut in the benchmark federal funds rate. But they should be careful for what they wish for. Economists say that if the Fed cuts the overnight bank lending rate before a scheduled Sept. 18 meeting, it would result from the near-panic market conditions seen last week.
Fed Chief Bernanke embraced the moral hazard and decided to act. The Fed blinked, cut the discount rate, and markets in Europe exploded out of the gates this Monday morning.
Investors will be watching every move by the Federal Reserve for buy and sell cues after learning last week that more aggressive monetary policy moves can spark explosive reactions in the financial markets. Analysts say they see credit turmoil only temporarily arrested by the Federal Reserve's surprise cut in the discount rate.
Wall Street is set for a higher open after world stock markets rebounded in a Fed-inspired relief rally. Tokyo stocks were up 3%, the biggest gain in more than a year, in its first trading day since the Fed move. European stock markets, up sharply Friday, continue to rise this morning.
Just 10 days after reiterating that inflation was its main concern, the Federal Reserve's policy-setting panel made a 180-degree turn Friday, laying the groundwork for an interest rate cut as early as next month.
By an overwhelming 96% majority, the Wall Street money managers, investment strategists and economists responding to a CNBC Trillion Dollar Snap Survey today, say the Federal Reserve "did the right thing" when it lowered the discount rate this morning.
It's been easy over the last few months to feel a bit sorry for Hank Paulson. He left Goldman Sachs, reluctantly, to lead President Bush's second-term Treasury in the belief that his skills might help solve two thorny problems: deteriorating political sentiment toward China's rising economic might, and the long-term insolvency of the U.S. entitlement programs as the Baby Boom generation heads toward retirement.
The Federal Reserve approved a half-percentage point cut in its discount rate on loans to banks Friday, a dramatic move designed to stabilize financial markets roiled by a widening credit crisis.
As financial markets appeared to calm Monday, so did speculation that the Federal Reserve would cut interest rates anytime soon. "The Fed would not do this unless the situation got extremely dire and market troubles were having a profound negative impact on the economy," said Northern Trust chief economist Paul Kasriel.
A market crash, currency meltdowns, bubbles and war … Alan Greenspan weathered them all during his stint as Fed chief.
Though it may not seem like much by the relatively loquacious and candid ways of his successor Ben Bernanke, Alan Greenspan was a proponent of transparency and made the Fed more transparent than his predecessors– even if his speeches and official testimony were memorably obtuse.
Daniel Mudd, chief executive of mortgage lender Fannie Mae, told CNBC that the housing slump won't hit bottom for another year and that the current credit crunch will spread “all across the housing market.”
The Fed's comments yesterday calmed some of the credit angst in the markets and set the stage for a move higher in global equities. U.S. stocks are positioned to trade higher this morning, and Cisco's strong earnings news is adding some punch to the Nasdaq.
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The Federal Reserve left a key interest rate unchanged on Tuesday as worries about inflation trumped concerns about turbulent financial markets. Fed Chairman Ben Bernanke and his colleagues voted unanimously to keep their target for the federal funds rate, the interest that banks charge each other, at 5.25 percent, where it has been for more than a year.
The U.S. Federal Reserve is expected to hold overnight interest rates steady and reaffirm concerns about inflation at its meeting on Tuesday, but may also acknowledge emerging signs of economic weakness.
The Bernanke Fed is being put to its first big test as Fed watchers monitor its handling of the credit drama when it releases its statement at 2:15 p.m. The Fed's one day meeting is not expected to end with any adjustment in rates, but traders are hoping for a tweaking of the Fed statement with language that will soothe some of the anxiety about mortgage and credit markets.