Monetary News Nov. 22-24

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News
WEDNESDAY
Fed Trims Outlook on Growth and Jobs
Federal Reserve officials downgraded their outlook for the U.S. economy at their early November meeting, projecting that the jobless rate could exceed 8% for two more years and that it won't return to its former vitality for five years or more.
Fed Considered long-term target in secret
The US Federal Reserve considered a radical change to its monetary policy at an unannounced metting in mid October which could have committed it to buying an unlimited amount of securities.
Federal Reserve minutes show split on QE2
When Federal Reserve policymakers met behind closed doors earlier this month to discuss the controversial policy of quantitative easing, the debate was a contentious one.
Corporate Issuers Freeze Up
Worries about Europe's debt troubles and growing tensions in Korea froze corporate credit markets.

MONDAY
Geithner Says Obama Opposes Depriving Fed of Employment Mandate
U.S. Treasury Secretary Timothy F. Geithner said the Obama administration would oppose any effort to strip the Federal Reserve of its mandate to pursue full employment and warned Republicans against politicizing the central bank.
Backlash could tie Fed's hands, Goldman says
Are hopes for a QE2-driven recovery already drifting off course?

Economists Comments
WEDNESDAY
Ben Bernanke: The Central Banker, the Diplomat?
The chairman's vision, where the emerging world should just do what the developed world wants it to do, isn't going to happen. And lecturing people on a specific world view isn't going to make you any friends.
Here's Why the Fed Plan is Failing: We're All Austrians Now
It's no accident that Austrian economic is newly popular. It provides the best explanation for the business cycles we just lived through.

TUESDAY
BACON: Bernanke's raid on the middle class
Fed action will reward the profligate and punish the prudent.
Fed Can’t Serve Two Masters
Last week Congressman Pence and Senator Corker announced a bill to end the Federal Reserve’s dual mandate of price stability and maximum employment.

MONDAY
Seventies Revival
How close are we to a 1970s scenario? There are similarities as well as differences.
I'd Sign Any Letter to Avert Inflation Crisis: Kevin Hassett
The biggest potential benefit of QE2 is that it will reduce the risk of deflation. If prices start dropping, the economy could conceivably enter a death spiral, especially if wages don’t adjust downward as prices fall. In that case, employers might cut even more workers.
O Deflation, Where Is Thy Sting?
Whether or not we are in danger of deflation all depends on what your definition of deflation is.
A Critical Analysis of Current Federal Reserve Actions and Their Consequences
An exploration of recent QE actions by the Fed, the repercussions, and what implications similar policies may have on financial markets, the global economy going forward.
Bernanke Under Fire: Why an Early Tuesday Turkey Could Shake Up Markets
On November 23, the Fed will release the minutes of the FOMC meeting held earlier this month as Bernanke steps up defense of QE2 in the face of growing criticism.

Blogs
WEDNESDAY
Thoughts on QE2
A LOT has been written recently, pro and con, about the Fed’s new round of quantitative easing, dubbed QE2. But, frankly, much of the discussion on both sides lacks a coherent analytical framework for thinking about the key issues. I try here to provide such a framework.
Secondary Sources: QE2 Exit, Fed and Inflation, Bank Scrutiny
A roundup of economic news from around the Web.
Economists React: Fed Failing on Both Sides of Mandate
The bottom line from the forecasts is that the FOMC thinks that it will be failing on both sides of its dual mandate three years from now. It is easy to understand their dovishness given that outlook.
The case for doing less or nothing
John Taylor lays out the case for rules vs. discretion and in the process, does a superb job of summarizing his case for why doing less or even nothing would have been better than the activist government response over the last two and a half years.
The Fed’s Clouded Vision Of The Future
If you are looking for guidance and clarity from the Federal Reserve, your trust will be misplaced. The recently released minutes of the Federal Reserve Open Market Committee’s (FOMC) November meeting reveal a deeply divided Fed with no clear consensus on the effectiveness of their policies.

TUESDAY
Weaker Dollar Not Likely to Spur Job Creation
The effects of monetary easing are starting to hit the market, including an increase in US exports.

MONDAY
Geithner Politicizes the Fed, Warns Congress Not to Do the Same
To top it off, the Fed itself is politicizing the Fed by interfering and commenting on fiscal policy while whining about Congress commenting on monetary policy.
Bernanke Translated
Here are excerpts from Mr. Bernanke’s remarks, with translation by David Wessel, economics editor of The Wall Street Journal and author of “In Fed We Trust: Ben Bernanke’s War on the Great Panic.”
Bank Failures Reach 149 in 2010, Totaling 314 Since End of 2007
The FDIC closed three more community banks last Friday. There are now 22 failures so far in the fourth quarter.

Reports
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