News
Market Watch | Banks would see losses of $501 billion under tough Fed test
Thirty of the largest banks that operate in the U.S. would see losses of $501 billion under a severe recession, the Federal Reserve said Thursday in announcing stress-test results that it says show a banking system in better shape than five years ago. A less severe downturn would result in bank losses of $355 billion, the Fed said.
Bloomberg | Kocherlakota Says New Fed Guidance Fosters Policy Uncertainty
Federal Reserve Bank of Minneapolis President Narayana Kocherlakota, who dissented from this week’s decision on monetary policy, said the central bank’s new guidance about its policy intentions risks holding back economic growth by fostering uncertainty.
Econ Comments & Analysis
Market Watch | How the Fed is hurting seniors
The low-interest-rate policy does more harm than good.
Washington Times | Yellen’s message about Federal Reserve’s plans unsettle market
“Monetary policy will be geared to evolving conditions in the economy,” she said. “And the public does need to understand that as those views evolve, the committee’s views on policy will likely evolve with them.”
CNN Money | Yellen's big mistake
Yellen made just one mistake as far as I'm concerned. It was a big one though. You know how they say you're not supposed to discuss religion, politics and sex in polite company? Central bankers need to add the calendar to that list.
Bloomberg | It's OK If the Economy Overheats a Bit
The Federal Reserve’s decision yesterday to drop its commitment to keep interest rates near zero until the unemployment rate is below 6.5 percent shows that monetary policy has arrived at a new challenge: how to change tack as the U.S. economy reaches full employment.
Mercatus Center | Small Banks in the Eye of Dodd-Frank
Small banks didn't cause the financial crisis that led to the Dodd-Frank Wall Street Reform and Consumer Protection Act - and the act's framers said they didn't intend for the law's burdensome requirements to hit smaller institutions. But the results of our recent small-bank survey published through the Mercatus Center demonstrate the futility of these good intentions.
NBER | The Transmission of Federal Reserve Tapering News to Emerging Financial Markets
This paper evaluates the impact of tapering “news” announcements by Fed senior policy makers on financial markets in emerging economies. We apply a panel framework using daily data, and find that emerging market asset prices respond most to statements by Fed Chairman Bernanke, and much less to other Fed officials.
Blogs
WSJ: Real Time Economics | The Case for Not Worrying So Much About Fed-Generated Financial Instability
There is a steady drumbeat from some corners of Wall Street and some academic economists that the Federal Reserve’s very low interest rates and unconventional monetary policy, inevitably, will create bubbles and financial instability somewhere.
