Federal Reserve Begins Taking Steps to Fight Growing Inflation

The Federal Reserve said in September that it would begin taking steps to combat growing inflation in the U.S. economy, according to notes from a Sept. 21 and Sept. 22 Open Market Committee meeting first obtained by The Wall Street Journal. 

The Federal Reserve will be scaling back its $120 billion monthly purchases of U.S. Treasury and mortgage securities due to the growing surge in inflation and strong consumer spending leading to heightened demand, according to minutes from a September meeting released Wednesday by the WSJ. The reduction in spending, commonly referred to as tapering, will begin in mid-November, and experts believe it could end by June, according to the meeting notes.

Read More

Federal Reserve Governor Thinks Regulators Need to Tell Banks How to Deal with Climate Change

Federal Reserve Governor Lael Brainard believes financial regulators should tell banks how to tackle climate change as a way to monitor threats to the overall financial system, The Wall Street Journal reported.

Brainard outlined in a speech how the central bank should prepare for climate change events like flooding and wildfires, which she thinks could deliver a shock to the markets and economy.

Read More

Inflation Hits Another Multi-Decade High After Fed Boosts Projection

A key economic index used by the Federal Reserve to measure inflation surged to another 30-year high in August as Americans continued to experience sticker shock.

The personal consumption expenditures (PCE) index increased 4.3% over the 12-month period ending in August, according to a Department of Commerce report published Friday. The figure represented the index’s highest increase since January 1991 when it surged at an annual rate of 4.5%, government data showed.

Minus energy and food prices, which are notoriously more volatile than other sectors, the PCE index increased at an annual rate of 3.6% in August, the Commerce Department reported. That is also the highest increase in more than 30 years.

Read More

Federal Reserve Could Soon Lose Control of Inflation Like in 1960s, Economic Historian Says

Prominent economic historian Niall Ferguson said current inflation could be in line with where it was in the 1960s during the period that preceded a decade of high consumer prices, CNBC reported.

“What is interesting about disasters is that one can lead to another,” Ferguson said in a Friday interview with CNBC. “You can go from a public health disaster to a fiscal, monetary and potentially inflationary disaster.”

During the 1960s, inflation stayed low before shooting up in the 1970s, according to government economic data. Consumer prices ultimately peaked in 1980 before rapidly declining.

Read More

Census, Fed Data on Minorities Challenge Critical Race Theory Narratives of White Suppression

Minorities have increased their mobility and financial standing over the last decade, according to federal data that challenges some of the narratives of the so-called Critical Race Theory spreading through schools and media.

While the Federal Reserve reports that “the typical white family has eight times the wealth of the typical black family and five times the wealth of the typical Hispanic family” it also acknowledges that African-American and Hispanic families have made significant gains.

Read More

Key Inflation Measure Spikes Again, Hits Highest Level Since 1991

Person in white shirt, walking into Gap store

A consumer price measurement used by the Federal Reserve to track inflation spiked again in June and hit its highest level since 1991, government data showed.

The personal consumption expenditures (PCE) price index increased 4% over the 12 months between July 2020 and June, according to a Bureau of Economic Analysis report released Friday. Excluding volatile energy and food prices, the index spiked 3.5% in that same 12-month period.

The index increased 0.5% in June, in line with economists’ forecasts, CNBC reported.

“Inflation has increased notably and will likely remain elevated in coming months before moderating,” Federal Reserve Board Chair Jerome Powell said during a press conference this week. “As the economy continues to reopen and spending rebounds, we are seeing upward pressure on prices, particularly because supply bottlenecks in some sectors have limited how quickly production can respond in the near term.”

Read More

Federal Reserve Chair: Inflation to be ‘Elevated for Months’

Jerome Powell

Federal Reserve Chairman Jerome Powell tried to calm lawmakers’ fears about rising inflation but also said it would probably remain elevated for months to come.

Testifying before Congress this week, Powell said the Federal Reserve was willing to step in to address the situation, but that inflation should level out next year.

“As always, in assessing the appropriate stance of monetary policy, we will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if we saw signs that the path of inflation or longer-term inflation expectations were moving materially and persistently beyond levels consistent with our goal,” Powell said in his prepared testimony.

Read More

Red States Top Those with Lowest Unemployment Rates

"Come in, we're hiring!"

Republican-led states and Vermont reported the lowest unemployment rates in April, according to a new report by the U.S. Commerce Department. States led by Democratic governors recorded the highest jobless rates, according to the report.

Unemployment rates were lower in April in 12 states and the District of Columbia and stable in 38 states, according to the U.S. Bureau of Labor Statistics.

States with the highest unemployment rates in April were Hawaii (8.5%), California (8.3%), New Mexico and New York (both at 8.2%), and Connecticut (8.1%). All five states with the highest unemployment are run by Democratic trifectas, meaning Democrats control the governor’s office and both houses of the state legislature.

Read More

Senate Republicans Expand Investigation into ‘Woke Mission Creep’ of Federal Reserve

Federal Reserve

Senate Banking Committee Republicans have expanded an investigation into regional Federal Reserve banks over their alleged “woke mission creep.”

Republicans on the Senate Banking Committee sent letters to regional Federal Reserve banks in Minneapolis, Boston and Atlanta demanding a briefing with leaders and documents related to a recent “Racism and the Economy” initiative, GOP staffers said during a press briefing Monday morning. Engaging in political advocacy is out of the Fed’s purview, the letters said.

“Of course, racism is abhorrent and has no place in our society…. I recognize the interest in studying economic disparities along demographic lines, such as race and gender,” Banking Committee Ranking Member Pat Toomey wrote in the letters sent Sunday.

Read More

Inflation Increasing Quicker Than Expected, Former Treasury Secretary Larry Summers Says

Larry Summers

Top American economist Larry Summers is sounding the alarm on rising U.S. inflation, saying that it is ticking up quicker than he originally expected.

Inflation is increasingly a more concerning and larger threat as consumer prices continue to rise, former National Economic Council Director and Treasury Secretary Larry Summers told Axios on Monday. He also criticized the Federal Reserve’s policies, suggesting that its decision to keep interest rates low could harm the economy.

“Data are pointing more towards higher inflation than I expected, and sooner,” Summers told Axios. “With more inflation signs sooner than I would have expected.”

Read More

Fed Says ‘Full Range of Tools’ in Play to Counter Pandemic

The Federal Reserve is promising to use its “full range of tools” to pull the country out of a recession brought on by a global pandemic, signaling that it would keep interest rates low through 2022.

In its semi-annual monetary policy report to Congress, the central bank said Friday that the COVID-19 outbreak was causing “tremendous human and economic hardship across the United States and around the world.”

Read More

Commentary: If Larger States Remain Closed, America May Need a Bank Debt Holiday to Avert Another Financial Crisis

Another 5.2 million Americans filed for initial unemployment claims last week, bringing the total number of jobs lost to the Chinese coronavirus and related government closures to anywhere from 21.8 million to 24.8 million jobs lost in about one month, and when added to the 5.8 million who were already jobless, produces an effective unemployment rate of 16.7 to 18.5 percent.

Read More

Commentary: The U.S. Economy Will Weather the Chinese Coronavirus

Tennessee Star

President Donald Trump praised the Federal Reserve for cutting the federal funds rate to a range of 0 percent to 0.25 percent, and restarting quantitative easing with $500 billion of U.S. treasuries purchases and $200 billion of mortgage purchases in response to the Chinese coronavirus global pandemic.

“It makes me very happy and I want to congratulate the Federal Reserve,” he said. “That’s a big step and I’m very happy they did it.” Trump has been hounding the Fed for years to cut interest rates to make the dollar more competitive against trading partners’ currencies including the yuan, euro and peso. Now he gets his wish.

Read More

U.S. Officials Battle Coronavirus on Multiple Health Care, Economic Fronts Even as Death Toll Reaches 9

The coronavirus death toll in the United States hit nine on Tuesday, even as more areas around the world report infections.

Read More

Commentary: We Need Supply Side Warrior Steve Moore on the Fed Board

by George Rasley   In late March, and partly at the urging of Larry Kudlow, Director of President Trump’s National Economic Council, the President announced his intention to nominate our good friend Stephen Moore to one of the two open seats on the Federal Reserve Board of Governors. Conservatives, who…

Read More

Herman Cain’s Fed Nomination May Be Over Before It Starts

by Whitney Tipton   Several GOP senators expressed concern Tuesday over Trump’s selection of Herman Cain for the Federal Reserve Board, casting doubt that the former GOP presidential candidate will be formally nominated. Two Republicans raising issues, Republican North Dakota Sen. Kevin Cramer and Republican South Carolina Sen. Tim Scott,…

Read More

Trump Picks Former Presidential Candidate Herman Cain for Fed Board

U.S. President Donald Trump plans to nominate former pizza chain executive and Republican presidential candidate Herman Cain for a seat on the Federal Reserve Board, where he will help set interest rates for the world’s biggest economy. “I have recommended him highly for the Fed,” Trump said in a press…

Read More

As The Fed Dumps Billions in Government and Mortgage Bonds, Questions of ‘Engineering’ a Recession Swirl as 2020 Nears

by Robert Romano   Recession warning lights are flashing predictably after the Federal Reserve has finally ended quantitative easing – it’s now dumping $50 billion of government and mortgage bonds a month – and short-term interest rates have risen. The 10-year-3-month treasuries spread inverted on March 22, and the 10-year-2-year and the 10-year-federal-funds-rate do not appear…

Read More

Trump to Nominate Stephen Moore for Fed Board

President Donald Trump said Friday that he will nominate Stephen Moore, a conservative economic analyst, to fill a vacancy on the Federal Reserve’s seven-member board. Moore, a well-known and often polarizing figure in Washington political circles, served as an economic adviser to Trump during the 2016 presidential campaign. In that…

Read More

Commentary: The Federal Reserve Falls Short of the Rule of Law

by Alexander Salter   “Money is power.” We’ve all heard this aphorism many times before. Too often it’s a lazy shorthand dismissal of the finding of mainstream economics, which show that the pursuit and possession of money often entails innocuous or even beneficial consequences for society. Dr. Johnson was right…

Read More