....Bernanke Signals More Easing Likely if Job Growth Wanes...
Chairman Ben S. Bernanke is signaling the Federal Reserve will probably add to its record stimulus should the economy fail to make sufficient progress in creating jobs for 12.7 million unemployed Americans.
The policy-setting Federal Open Market Committee yesterday extended its Operation Twist program and will swap $267 billion in short-term securities with longer-term debt through the end of 2012. Fed officials also downgraded their forecasts for growth and employment while noting “significant downside risks” to the economy. Enlarge image U.S. Federal Reserve Chairman Ben S. Bernanke
Ben S. Bernanke, chairman of the U.S. Federal Reserve. Photographer: Andrew Harrer/Bloomberg Fed's Latest Move `Somewhat Disappointing'
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June 21 (Bloomberg) -- Bradford DeLong, professor of economics at the University of California at Berkeley, talks about Federal Reserve monetary policy and the outlook for the U.S. economy. The Federal Reserve will expand its Operation Twist program to extend the maturities of assets on its balance sheet and said it stands ready to take further action to put unemployed Americans back to work. DeLong speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg) Fed May Be `Laying Groundwork' for Later Easing
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June 21 (Bloomberg) -- Michael Cuggino, who manages about $17 billion at San Francisco-based Pacific Heights Asset Management, talks about the Federal Reserve's decision to expand its Operation Twist program and its implications for U.S. stocks. He speaks with Susan Li on Bloomberg Television's "First Up."(Source: Bloomberg) `Overall Lift' in Global Stocks Expected
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June 21 (Bloomberg) -- Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney, talks about Federal Reserve monetary policy and the outlook for global financial markets. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia."(Source: Bloomberg)
Bernanke, speaking at a Washington press conference, said policy makers are focusing “primarily” on the outlook for jobs in deciding whether to ease further, and more action would be needed without “sustained improvement in the labor market.” Payrolls grew at the slowest pace in a year in May, and the jobless rate has been stuck above 8 percent since February 2009.
“If job growth doesn’t pick up from the recent soft readings in the next few months, then the Fed would likely do more and do a full scale asset-purchase program,” said Dean Maki, chief U.S. economist at Barclays Plc in New York and a former Fed economist. “They’re prepared to take further action.”
U.S. stocks slipped after the Fed cut its estimates for growth and Bernanke said progress in the labor market has slowed. The Standard & Poor’s 500 Index fell 0.2 percent to 1,355.69 in New York. The yield on the benchmark 10-year Treasury note rose four basis points, or 0.04 percentage point, to 1.66 percent. ‘On Alert’
“They’re on alert for confirmation that the labor market weakness is a passing phenomenon,” said Michael Feroli, chief U.S. economist for JPMorgan Chase & Co. in New York and a former Fed economist. “There is certainly a decent chance that we don’t see a rebound in the labor market, and then they’d act again.”
Job growth short of 100,000 a month would probably prompt a third round of large-scale asset purchases, while monthly payroll increases of about 150,000 would probably make such a program unnecessary, Maki said. The Fed has already bought $2.3 trillion of securities in two quantitative-easing programs.
Bernanke said in April that employment growth of 100,000 a month is needed for “stability” in the job market, and that payroll increases of about 150,000 to 200,000 were consistent with the Fed’s forecasts for joblessness.
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ReplyDelete....Bernanke Signals More Easing Likely if Job Growth Wanes...
ReplyDeleteChairman Ben S. Bernanke is signaling the Federal Reserve will probably add to its record stimulus should the economy fail to make sufficient progress in creating jobs for 12.7 million unemployed Americans.
The policy-setting Federal Open Market Committee yesterday extended its Operation Twist program and will swap $267 billion in short-term securities with longer-term debt through the end of 2012. Fed officials also downgraded their forecasts for growth and employment while noting “significant downside risks” to the economy.
Enlarge image U.S. Federal Reserve Chairman Ben S. Bernanke
Ben S. Bernanke, chairman of the U.S. Federal Reserve. Photographer: Andrew Harrer/Bloomberg
Fed's Latest Move `Somewhat Disappointing'
Play Video
June 21 (Bloomberg) -- Bradford DeLong, professor of economics at the University of California at Berkeley, talks about Federal Reserve monetary policy and the outlook for the U.S. economy. The Federal Reserve will expand its Operation Twist program to extend the maturities of assets on its balance sheet and said it stands ready to take further action to put unemployed Americans back to work. DeLong speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Fed May Be `Laying Groundwork' for Later Easing
Play Video
June 21 (Bloomberg) -- Michael Cuggino, who manages about $17 billion at San Francisco-based Pacific Heights Asset Management, talks about the Federal Reserve's decision to expand its Operation Twist program and its implications for U.S. stocks. He speaks with Susan Li on Bloomberg Television's "First Up."(Source: Bloomberg)
`Overall Lift' in Global Stocks Expected
Play Video
June 21 (Bloomberg) -- Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney, talks about Federal Reserve monetary policy and the outlook for global financial markets. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia."(Source: Bloomberg)
Bernanke, speaking at a Washington press conference, said policy makers are focusing “primarily” on the outlook for jobs in deciding whether to ease further, and more action would be needed without “sustained improvement in the labor market.” Payrolls grew at the slowest pace in a year in May, and the jobless rate has been stuck above 8 percent since February 2009.
“If job growth doesn’t pick up from the recent soft readings in the next few months, then the Fed would likely do more and do a full scale asset-purchase program,” said Dean Maki, chief U.S. economist at Barclays Plc in New York and a former Fed economist. “They’re prepared to take further action.”
U.S. stocks slipped after the Fed cut its estimates for growth and Bernanke said progress in the labor market has slowed. The Standard & Poor’s 500 Index fell 0.2 percent to 1,355.69 in New York. The yield on the benchmark 10-year Treasury note rose four basis points, or 0.04 percentage point, to 1.66 percent.
‘On Alert’
“They’re on alert for confirmation that the labor market weakness is a passing phenomenon,” said Michael Feroli, chief U.S. economist for JPMorgan Chase & Co. in New York and a former Fed economist. “There is certainly a decent chance that we don’t see a rebound in the labor market, and then they’d act again.”
Job growth short of 100,000 a month would probably prompt a third round of large-scale asset purchases, while monthly payroll increases of about 150,000 would probably make such a program unnecessary, Maki said. The Fed has already bought $2.3 trillion of securities in two quantitative-easing programs.
Bernanke said in April that employment growth of 100,000 a month is needed for “stability” in the job market, and that payroll increases of about 150,000 to 200,000 were consistent with the Fed’s forecasts for joblessness.