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Tag Archives: FED

The Federal Reserve’s new Distributional Financial Accounts provide telling data on growing U.S. wealth and income inequality — Raksha Kopparam

Wealth disparities between the rich and the poor in the United States have broadened over the past 30 years, according to a new dataset released earlier this month by researchers at the Federal Reserve Board. Their Distributional Financial Accounts is the new dataset that provides quarterly estimates of wealth distribution in the country from 1989 to 2019. 2 The new dataset was created by integrating the Federal Reserve Board’s Financial Accounts with the Survey of Consumer Finances....

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Richard H Clarida — The Federal Reserve’s review of its monetary policy strategy, tools, and communication practices

I am delighted to be in Helsinki at this important conference on monetary policy and the future of Europe's monetary union. Today I would like to discuss the broad review of the Federal Reserve's monetary policy framework that my fellow policymakers and I are undertaking this year. We are examining the policy strategy, tools, and communication practices that we use to pursue our dual-mandate goals of maximum employment and price stability. In my remarks, I will describe the motivation for...

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Forget the Natural Rate, says the Head of the Minneapolis Fed

Low rates are here to stay The head of the Minneapolis Fed agrees with something that I discussed several times here (or here for the use of alternative unemployment measures like U6) in the blog, that the unemployment level (U3) is not a good measure of the slack in the labor market. Neel Kashkari says: No one knows how many more Americans want to work. But if the job market continues to improve with only modest wage growth and below-target inflation, it can be safely assumed that...

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Brian Chappatta —Fed Should Buy Muni Bonds to Fight the Next Recession

Say what you will about modern monetary theory, but it’s worth asking why it’s assumed that states in America, which wields the power of the world’s reserve currency, should turn to draconian austerity measures when the going gets rough. After all, no political party at the federal level even pretends to care about budget balance anymore. Governors, on the other hand, must spend within their means and consider trade-offs, whether they’re a Democrat or Republican. To their credit, many have...

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Fed Chair Powell gets it wrong, just as did Bill Dudley.

More proof we are ruled by morons.  The battle line is drawn, with the ruling elite and neoclassical economists at the center and the flanks occupied by Austrians and Libertarians on the right and clueless progressives on the left, with corporate media in the background, facing off with the MMT economists at the center flanked by MMT advocates, backed by a public that agrees with genuine progressive goals. Now it is a battle for hearts and minds. Quartz Actually, deficits do matter,...

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Bill Dudley — Budget Deficits Still Matter

Amazing. A major player at the Fed and key voice in setting monetary policy didn't know how the monetary system works based on correct operational understanding — which MMT provides and which he also proves ignorant about. And this when he was also serving on the FOMC and deeply involved in setting monetary policy for the US, which also affects the entire world, during the crisis and aftermath. Bloomberg OpinionBudget Deficits Still Matter Bill Dudley William C. Dudley is an American...

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Zero Hedge — Fed Net Worth Turns Negative Following Record $66BN In Paper Losses Tyler Durden

What immediately caught the attention of financial analysts is that the gaping Q3 loss of over $66 billion, dwarfed the Fed's $39.1 billion in capital, leaving the US central bank with a negative net worth, which would suggest insolvency for any ordinary company, but since the Fed gets to print its own money, it is of course anything but an ordinary company as Bloomberg quips. Commenting on the Fed's paper losses, former Fed Governor Kevin Warsh told Bloomberg that "a central bank with a...

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Reuters — Fed plans major review of how it pursues inflation, employment goals

The Federal Reserve will conduct an extensive review next year of how it tries to guide the U.S. economy, the U.S. central bank said on Thursday. “Now is a good time to take stock of how we formulate, conduct, and communicate monetary policy,” said Federal Reserve Chairman Jerome Powell, noting that the Fed was close to meeting its goals of maximum employment and a 2 percent inflation rate.  In a statement, the Fed said it would reach out to a “broad range” of stakeholders and that it...

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