Over the weekend senior officials at
the Fed worked the phones.
The week the fed saved the world: an inside glimpse at the Greenspan-McDonough-Ferguson team's backroom maneuvering
His concern echoed Hoenig's argument in May:
The Fed may have already eased too much.
Rebellion in the ranks. Greenspan's streak of unanimous FOMC decisions has come to an end
In December 1998, Fed authorities declared that henceforth they would announce changes in
the Fed's policy bias regarding the likely direction of short-term interest rates immediately, if it represented a significant shift in Fed thinking.
Now What, Alan?
Presumably, they would return Once
the Fed got it right.
The Fed's Folly
They say they reversed their decision to cut the discount rate at the meeting not because of Volcker's resignation threat but to give
the Fed chairman time to persuade the Bank of Japan and German Bundesbank to join
the Fed in a coordinated rate cut, which, in fact occurred ten days later.
The Woodward Treatment
While inflation is only slightly above
the Fed's comfort zone of between 1-2%, the consensus among economists is that it remains threatening enough to curtail a slackening in rates.
Fed keeps up its balancing act
Greenspan, former chairman of President Gerald Ford's Council of Economic Advisers, served as head of a Social Security reform commission during the first Reagan administration, then took over
the Fed from the great inflation buster Paul Volcker.
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Not only did Greenspan fail to raise rates or margin requirements, but also in the late 1990s,
the Fed chairman actually began to talk in glowing terms about the New Economy, conceding that technology had helped increase productivity.
Irrational annoyance: there are many things to blame Alan Greenspan for. The '90s stock bubble isn't one of them
If
the Fed is focused solely on creating positive inflation at a time that both productivity and aggregate demand are high, it will create too much liquidity as a byproduct.
Three ideas for the Fed: seeking new ways to measure inflation
Once again, this reflects the perverse economic priorities that have been fostered by
the Fed. In recent years,
the Fed has defined its mission as that of stimulating "aggregate demand" in order to keep the economy afloat.
From debt to dispossession: after abetting an unprecedented growth in both government and consumer debt, the Federal Reserve may be preparing to reduce the middle class to utter serfdom
The Fed's target interest rate on federal funds is followed closely, and expected changes in the future rate can affect the behavior of individuals and institutions.
How well does the federal funds futures rate predict the future federal funds rate?
According to Mayer's uneven account, which vacillates between gossipy insider stories and dry detail,
the Fed is the "umbrella supervisor" for everything financial, but knows and cares little about insurance, securities and, especially, derivatives.
In Fed We Trust?
It looks as if
the Fed is still using a traditional Phillips curve tradeoff between falling unemployment and rising inflation.
Overshoot? Behind the curve? Or just right? This time, will the Federal Reserve know how high to raise interest rates? TIE surveyed some leading Fed watchers to assess how the FOMC is doing
"
The Fed didn't cause the boom," says Lee Hoskins, who served as president of the Cleveland Federal Reserve Bank from 1987 to 1991.
No Controlling Authority
Business leaders have begun pointing out how
the Fed has squeezed the economy in general and their companies in particular.
CEOs Speak Out Against Greenspan