NEW YORK | By Ana Fuentes | If the Senate agrees and everything goes by the script, President Obama will pick Janet Yellen as the Federal Reserve’s next leader on Wednesday, the White House said. Ms. Yellen, 67, has been the Fed’s vice chairwoman since 2010 and would be the first woman to run the central bank. Among her first tasks is how quickly to wind down the U.S. expansionary monetary policy. Will she take even more aggressive measures to boost growth? If so, how will markets react?
NEW YORK | By Ana Fuentes | The U.S. Federal Reserve has been the talk of the town for weeks because of the tapering soap opera. But how much do we really know about the central bank on its centennial anniversary? An exhibit called “The Fed at 100” opened this Wednesday in New York, aiming to explore the Fed’s pivotal role throughout the history of American finance. And -that’s what we preferred- its response to economic crises.
MADRID | By J.P. Marín Arrese | Christine Lagarde’s stern warning on potential problems ahead for emerging countries has been delivered in rather a blunt way: “even with the best of efforts the dam might leak”. At the annual Fed gathering in Wyoming she claimed “further lines of defence” were needed to address a financial crisis. The hike in interest rates following the prospect of a progressive tapering in asset purchases by the US, has induced a sharp reversal in fund flows between developed and emerging markets.
MADRID | All the “Great Depression” stories show how both the governments’ blindness and central banks made the crisis last longer. So it does makes sense that in the current crisis both governments and central banks have been active to take measures, although not necessarily successful and effective. However, the ECB has been less belligerent than other bankers and its members don’t hold homogeneous positions.
WASHINGTON | By Pablo Pardo | Maybe this time Bernanke is just trying to provoke a mini-crash to lay the foundations for a progressive withdrawal of the monetary stimulus in 2014 or, maybe, 2015.
WASHINGTON | By Pablo Pardo | Let’s not forget, it was the Federal Reserve, through its massive liquidity injections, that saved the German banks in 2008 and again in 2010 and 2011.
WASHINGTON | Two online games posted in two regional Federal Reserve’s banks (San Francisco and Atlanta) enable us to forecast that the extremely accommodative US monetary policy will continue for a long period of time.
The ability of central banks to raise investors’ confidence is wearing off. More so when the European Central Bank has become a liability for the US Federal Reserve.
Mr Draghi, governor at the European Central Bank, should listen to his American colleague at the Federal Reserve. And follow suit by means of expnasionary monetary policies even if inflation reaches 4 percent.
Will inflation rise in the US? That is the expectation of investors. Is it due to the Federal Reserve’s monetary policy? You bet. But, economist Luis Arroyo concludes, eggs end up broken when making an omelette. Or when a central bank stimulates employment.