The US Federal Reserve is subject to intense scrutiny by governments and investors worldwide since its decisions can ripple throughout the global economy. But how does it really work? Dual mandate The Fed was created on December 23, 1913 under President Woodrow Wilson. Unlike most central banks, such as the European Central Bank, that focus solely on keeping inflation low, the US Congress assigned the Fed a "dual mandate" to promote maximum employment and price stability as it sets monetary policy. It also is one of the agencies charged with regulating banks and ensuring the soundness and stability of the financial system, a function that was sorely tested during the 2008 financial crisis. The Fed system The Fed is led by the Board of Governors in Washington, made up of seven members nominated by the president and confirmed by the Senate, including the chairman, Jerome Powell (although there currently are only four members). There also are 12 regional Fed banks throughout the United … [Read more...] about News The US Federal Reserve: How does it work?
Us federal reserve rate
WASHINGTON: President Donald Trump once more broke with protocol on Monday (Aug 20) as he criticised the US Federal Reserve for raising interest rates and accused it of failing to support his economic policies.And in an interview with Reuters, he declined to confirm his support for the central bank's independence, something that has the potential to worry financial markets.That was a step further than Trump went just a month ago, when he also said he was "not thrilled" with the Fed for raising the key interest rate.As the US economy has recovered, the Fed has raised the benchmark lending rate seven times since December 2015, twice this year under current Chairman Jerome Powell, and it expected to hike twice more in 2018.Powell in a radio interview in mid-July said he was not concerned about pressure on him to alter policy, saying "we don't take political considerations into account."He added at the time that "no one in the administration has said anything to me that really gives … [Read more...] about Trump once again criticises Federal Reserve, rate hikes
And although he acknowledged concern among businesses nationwide about the uncertainty created by President Donald Trump's abrasive trade policies, Fed Chairman Jerome Powell stressed that "the US economy is in great shape." The unanimous vote the Fed's rate-setting Federal Open Market Committee brings the federal funds rate to a range of 1.75-2.0 percent, and indicated there would be two more rate increases this year and four next, one more than previously expected. Wall Street was not happy with the aggressive new stance, worried that it signaled concerns about rising prices. All three major indexes turned negative right after the announcement and closed even lower. The Dow Jones Industrial Average dropped 0.5 percent and the broad-based S&P 500 shed 0.4 percent. However, Powell downplayed concerns about accelerating inflation, saying the central bank would not overreact to an expected uptick driven by the recent increase in oil prices and would aim for the rate to hold at … [Read more...] about US Federal Reserve raises key interest rate, signals more hikes coming
US Federal ReserveJerome Powell Five big themes likely to dominate thinking of investors and traders in the coming week and the stories related to them By Reuters March 19, 2018 12:44 PM (UTC+8) Share Tweet Linkedin Print Email Share 0 Comment 0 1. Fed A-head The US Federal Reserve’s first meeting with new head Jerome Powell at the helm takes place on Tuesday and Wednesday and an interest rate rise – this year’s first – is seen as a done deal. Against the backdrop of brewing inflationary pressures, mortgage rates and Treasury yields have been rising and risk assets including equities and junk debt prices have been exhibiting signs of stress. The dailyReport Must-reads from across Asia - directly to your inbox World investors will be paying close attention to the wording of the Fed statement for clues on whether Powell and co think conditions are now strong enough to hike rates beyond the three the financial markets have been forecasting. Oh, … [Read more...] about US Federal Reserve rate rise expected under Powell
WASHINGTON: The Federal Reserve on Wednesday raised the key lending rate for the first time this year to its highest level in a decade, citing a stronger outlook for US economic growth. Newly installed Fed Chairman Jerome Powell presided over his first meeting, which raised the federal funds rate to 1.5-1.75 percent, a move that will affect all types of loans, from homes to cars to student debt. In his first press conference as Fed chief, Powell pointed to the factors that have boosted the economic outlook in recent months, including “more stimulative” fiscal policy, in the wake of the massive tax cuts Congress passed in December. In addition, he said “ongoing job gains are boosting incomes and confidence (and) foreign growth is on a firm trajectory.” That likely caused Fed officials to signal they expect a slightly more aggressive path for rate increases next year. Still, Powell told reporters that even with rising interest rates, the world’s largest … [Read more...] about US Federal Reserve raises key interest rate