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	<title>SwamplandCategory: Federal Reserve &#124; Swampland &#124; TIME.com</title>
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	<description>Political insight from the Beltway and beyond</description>
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		<title>SwamplandCategory: Federal Reserve &#124; Swampland &#124; TIME.com</title>
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		<item>
		<title>The Fed Finally Does Something About Unemployment. And It&#8217;s Big.</title>
		<link>http://swampland.time.com/2012/12/12/the-fed-finally-does-something-about-unemployment-and-its-big/</link>
		<comments>http://swampland.time.com/2012/12/12/the-fed-finally-does-something-about-unemployment-and-its-big/#comments</comments>
		<pubDate>Wed, 12 Dec 2012 21:05:15 +0000</pubDate>
		<dc:creator>Michael Grunwald</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=83363</guid>
		<description><![CDATA[Wow. I’ve been a broken record about America’s stay-the-course monetary policy, about the Fed failing to fulfill its mandate to maximize employment at a time of rampant joblessness,  about Ben Bernanke channeling Jerry Seinfeld and basically doing nothing while Congress was doing less than nothing.  Well, Bernanke and the Fed did something Wednesday. They did something big. The technical details are pretty dull. The Fed announced that it intends to keep its key interest rate at zero until unemployment drops to 6.5%, the first time it’s ever set a target for employment. It also signaled that it will tolerate inflation as high as 2.5%, above its stated goal of 2%. And it extended its “QE3” bond-buying program to hold down long-term interest rates. What it means is that Bernanke and his fellow inflation doves have won their argument with the hawks, and the Fed is stepping on the accelerator instead of riding the brakes. After three years of doing a wonderful job of maintaining stable prices while doing a terrible job of maximizing employment, the Fed finally seems determined to take its dual mandate seriously. As Bernanke admitted in his press conference, the Fed has consistently overestimated the pace of growth since the recovery began in 2009. The hawks who already describe Bernanke as Helicopter Ben and Zimbabwe Ben are sure to screech that the new targets will produce hyperinflation, which they always think is just around the corner. But as I’ve written, a little inflation can be good for economic growth, encouraging families and businesses to spend and invest rather than hoard their cash. And persistently high unemployment is a tragic waste of human capital. It ruins lives. It hurts kids. It’s the enemy. In an ideal world, Congress would try to do something about it with fiscal policy. But after Republicans reclaimed the House in November 2010, the Capitol Hill conversation turned to austerity. President Obama refused to accept GOP austerity demands, so the U.S. hasn’t followed Great Britain back into recession. But Republicans have refused to accept Obama’s<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=83363&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link><featured_image>http://timeswampland.files.wordpress.com/2012/09/sl_bernanke_0913.jpg?w=200</featured_image>
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			<media:title type="html">U.S. Federal Reserve Chairman Bernanke delivers remarks at the Federal Reserve in Washington</media:title>
		</media:content>

		<media:content url="http://1.gravatar.com/avatar/ddcaf430de0f1a59f27cc4ad614221d9?s=96&#38;d=http%3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">michaelgrunwald</media:title>
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	</item>
		<item>
		<title>At Long Last, Bernanke Acts</title>
		<link>http://swampland.time.com/2012/09/14/at-long-last-bernanke-acts/</link>
		<comments>http://swampland.time.com/2012/09/14/at-long-last-bernanke-acts/#comments</comments>
		<pubDate>Fri, 14 Sep 2012 16:53:40 +0000</pubDate>
		<dc:creator>Michael Grunwald</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[bernanke]]></category>
		<category><![CDATA[qe3]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=78411</guid>
		<description><![CDATA[Finally! For too long, Ben Bernanke and the Fed have been talking and acting as if our greatest risk were inflation, as if the dollar were a delicate flower and America were in danger of becoming Zimbabwe.  With new monetary stimulus and bold rhetoric to accompany it, the Fed has made it clear that our greatest risk is stagnation, that the dollar is fine and America’s real danger is becoming Europe. Ever since Bernanke&#8217;s whatever-it-takes lending spree after the financial collapse of 2008, the Fed has virtually ignored the second half of its dual mandate to stabilize prices and maximize employment. It has focused on the hypothetical risk of future inflation — even though the inflation rate was below its unofficial target of 2% — while doing little about a joblessness rate that has festered above 8%. The Fed’s QE3 purchases of mortgage-backed securities that Bernanke announced yesterday, along with a promise to keep buying as long as the economy needs support, are its most aggressive move since the chaos of the meltdown subsided. (PHOTOS: Political Pictures of the Week, Sept. 7-14) In the past, Bernanke has suggested that fiscal stimulus from Congress would be a more effective response to the slack economy than monetary stimulus from the Fed, and he had a point. Congress can pour money directly into the wallets of consumers and the coffers of businesses through tax rebates, safety-net programs and public works; the Fed pumps money into banks that won’t lend unless there’s already demand in the economy. And with interest rates at historic lows, the U.S. government can essentially borrow the money to inject fiscal stimulus for free. But Congress hasn’t acted. Specifically, congressional Republicans have refused to act. President Obama pushed a jobs bill that would have provided more stimulus through tax cuts, infrastructure projects and other spending, but it was dead on arrival in the GOP-controlled House. In fact, Republicans have called for immediate austerity, the strategy that has produced double-dip recessions in Spain and England. Obama has refused to go along with<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=78411&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">michaelgrunwald</media:title>
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	</item>
		<item>
		<title>It&#8217;s Ben Bernanke&#8217;s Economy Now</title>
		<link>http://swampland.time.com/2012/09/13/its-ben-bernankes-economy-now/</link>
		<comments>http://swampland.time.com/2012/09/13/its-ben-bernankes-economy-now/#comments</comments>
		<pubDate>Thu, 13 Sep 2012 20:19:19 +0000</pubDate>
		<dc:creator>Adam Sorensen</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[2012]]></category>
		<category><![CDATA[bernanke]]></category>
		<category><![CDATA[obama]]></category>
		<category><![CDATA[qe3]]></category>
		<category><![CDATA[quantitative easy]]></category>
		<category><![CDATA[Romney]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=78377</guid>
		<description><![CDATA[Here&#8217;s why you should care about the Federal Reserve&#8217;s latest round of bond-buying, announced Thursday by the central bank: One man has assumed the task of  getting the flagging U.S. economy back on track. He says he&#8217;ll work for as long as it takes, all by himself if he has to. And he isn&#8217;t even an elected official.  Chairman Ben Bernanke&#8217;s decision to make $40 billion in monthly asset purchases until the jobs market recovers marks a dramatic change of course for the Fed, which in the past has limited monetary stimulus to set periods of time. The pace of new bond-buying &#8212; or quantitative easing, as it&#8217;s technically termed &#8212; will lag behind that of similar action taken in the wake of the 2008 financial crisis, but the commitment is completely open-ended. &#8220;To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens,&#8221; reads the statement from the Federal Open Market Committee. Translation: The central bank is done with temporary measures. It&#8217;s going to see this through until the job market is fully recovered and then some. (PHOTOS: Chairman of the Federal Reserve Bank Ben Bernanke) That could be a while. &#8220;There’s not a specific number we have in mind, but we see the last six months isn’t it,” Bernanke said at an afternoon press conference in Washington, in which he conceded the Fed alone lacks &#8221;tools that are strong enough to solve the unemployment problem.&#8221; The current state of the U.S. economy is blah. The Federal Reserve&#8217;s new projections can be found here, but to sum up: Inflation is in check; growth is happening, but barely; unemployment is coming down, but many people are still out of the workforce. There&#8217;s been no fiscal pump-priming enacted by Congress since the end of 2010 and major tax hikes and spending cuts, part of last summer&#8217;s debt ceiling deal, loom in January if Congress doesn&#8217;t act. That dysfunction is part<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=78377&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://swampland.time.com/2012/09/13/its-ben-bernankes-economy-now/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link><featured_image>http://timeswampland.files.wordpress.com/2012/09/sl_bernanke_0913.jpg?w=200</featured_image>
		<media:thumbnail url="http://timeswampland.files.wordpress.com/2012/09/sl_bernanke_0913.jpg?w=200" />
		<media:content url="http://timeswampland.files.wordpress.com/2012/09/sl_bernanke_0913.jpg?w=200" medium="image">
			<media:title type="html">U.S. Federal Reserve Chairman Bernanke delivers remarks at the Federal Reserve in Washington</media:title>
		</media:content>

		<media:content url="http://1.gravatar.com/avatar/7666b70a5b0305bd59953f5bca02cce5?s=96&#38;d=http%3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">Adam Sorensen</media:title>
		</media:content>
	</item>
		<item>
		<title>Mitt Romney&#8217;s Monetary Policy Mystery Continues</title>
		<link>http://swampland.time.com/2012/09/10/mitt-romneys-monetary-policy-mystery-continues/</link>
		<comments>http://swampland.time.com/2012/09/10/mitt-romneys-monetary-policy-mystery-continues/#comments</comments>
		<pubDate>Mon, 10 Sep 2012 21:11:54 +0000</pubDate>
		<dc:creator>Adam Sorensen</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Mitt Romney]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=78194</guid>
		<description><![CDATA[A while back I wrote about the opacity of Romney&#8217;s views on monetary policy, so it&#8217;s worth circling back around given that he touched on the issue briefly in his interview on Meet the Press. Here&#8217;s the relevant portion of the transcript: MR. ROMNEY:  I mean, this&#8211; this is&#8211; this is really saying that people are having a hard time finding work. It’s very, very troubling.  And of course the stock market does well in part because the indication by the Fed that they&#8217;re going to print more money, pour more money into the system, says we&#8217;re likely to have down the road high inflation.  And where else are you going to go?  If interest rates are going to be near zero investors have to go somewhere to protect against inflation.  The stock market&#8217;s the only place to go. GREGORY:  You don&#8217;t think the Fed ought to be any more involved at this point? MR. ROMNEY:  Well, I don&#8217;t think that&#8211; that easing monetary policy is going to make a significant difference in the job market right now.  I&#8211; I think what the&#8211; the nation needs is a change in fiscal policy.  A&#8211; a different structure to our economic positions.  And if we take the right course I believe you&#8217;re going to see this economy come roaring back, because I do believe, as you began by saying, that&#8211; that there are&#8211; many, many entrepreneurs as well as major corporations that are ready to jump, but they&#8217;re hoping to see the kind of conditions on the ground in this country, the economic conditions, the pro-business, pro-jobs conditions, that suggest it&#8217;s a good idea to invest in America again. There are a few things worth pointing out here. One is Romney&#8217;s continued ability to talk about monetary policy without offering any hint of his guiding philosophy.  His statement that easing is not “going to make a significant difference in the job market right now” is not particularly telling. Depending on how you define “significant,” I think you’d be hard-pressed to find someone who<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=78194&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://swampland.time.com/2012/09/10/mitt-romneys-monetary-policy-mystery-continues/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Mitt Romney</primary_category><primary_category_link>http://swampland.time.com/category/2012-election/mitt-romney-2012-election/</primary_category_link>
		<media:content url="http://1.gravatar.com/avatar/7666b70a5b0305bd59953f5bca02cce5?s=96&#38;d=http%3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">Adam Sorensen</media:title>
		</media:content>
	</item>
		<item>
		<title>Stop Me If You&#8217;ve Heard This Before: Ben Bernanke Stays the Course</title>
		<link>http://swampland.time.com/2012/06/20/stop-me-if-youve-heard-this-before-ben-bernanke-stays-the-course/</link>
		<comments>http://swampland.time.com/2012/06/20/stop-me-if-youve-heard-this-before-ben-bernanke-stays-the-course/#comments</comments>
		<pubDate>Wed, 20 Jun 2012 21:09:19 +0000</pubDate>
		<dc:creator>Michael Grunwald</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[ben bernanke]]></category>
		<category><![CDATA[monetary policy]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=72828</guid>
		<description><![CDATA[I’m having trouble thinking of something to say about Fed chairman Ben Bernanke deciding to stay the course that I haven’t said again and again and again. What was true more than two years ago remains true today: The economy could still use more monetary stimulus, but Bernanke doesn’t intend to provide it. The Fed’s decision today to continue Operation Twist through the end of the year but to refrain from any additional easing suggests that he still thinks the unemployment situation is a disaster, but he still doesn’t plan to do much about it, although there were signs he might grudgingly step on the gas a bit in the future to prevent further deterioration. The Fed has a dual mandate of stabilizing inflation and maximizing employment, and it’s clearly failing the second part. So why is Bernanke so reluctant to act? For one thing, he thinks fiscal stimulus from Congress would be more effective than another round of quantitative easing, which is probably true, but Congress isn’t going to pass any more fiscal stimulus, so it’s kind of irrelevant. But Bernanke also thinks the potential benefits of pumping more money into an already liquid banking system would be modest and uncertain, while the potential risks of freaking out inflation-obsessed investors who already think of him as Zimbabwe Ben could be dramatic and real. Maybe he’s wrong, but that’s what he thinks. If there’s another bad jobs report next month, he’ll probably be able to persuade his board to loosen policy a bit to avert disaster. He thinks his QE2 helped prevent deflation; maybe a QE3 would help prevent a double-dip recession. But he clearly doesn’t intend to act with the whatever-it-takes abandon that reinvented central banking and helped save the world from a second depression in 2008 and 2009. He clearly doesn’t consider 8% unemployment an emergency on par with, say, 5 percent inflation, even though some inflation could be helpful right about now. Oh, wait, I’ve said that before, too. Basically, we’re in the same boat we’ve been<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=72828&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://swampland.time.com/2012/06/20/stop-me-if-youve-heard-this-before-ben-bernanke-stays-the-course/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link><featured_image>http://timeswampland.files.wordpress.com/2012/06/sl_bernanke_0620.jpg?w=200</featured_image>
		<media:thumbnail url="http://timeswampland.files.wordpress.com/2012/06/sl_bernanke_0620.jpg?w=200" />
		<media:content url="http://timeswampland.files.wordpress.com/2012/06/sl_bernanke_0620.jpg?w=200" medium="image">
			<media:title type="html">Ben Bernanke</media:title>
		</media:content>

		<media:content url="http://1.gravatar.com/avatar/ddcaf430de0f1a59f27cc4ad614221d9?s=96&#38;d=http%3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">michaelgrunwald</media:title>
		</media:content>
	</item>
		<item>
		<title>Is the Fed to Blame for JPMorgan’s $2 Billion Blow-Up?</title>
		<link>http://business.time.com/2012/05/16/is-the-fed-to-blame-for-jpmorgans-2-billion-blow-up/</link>
		<comments>http://business.time.com/2012/05/16/is-the-fed-to-blame-for-jpmorgans-2-billion-blow-up/#comments</comments>
		<pubDate>Wed, 16 May 2012 11:43:48 +0000</pubDate>
		<dc:creator>Christopher Matthews</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=70962</guid>
		<description><![CDATA[The JPMorgan $2-billion-trading-loss story is nearly a week old, and the news has predictably gone through the various spin cycles of the political right and left. Initially, progressives pounced on the loss as reason to strengthen the yet-to-be-fully-implemented Dodd-Frank financial reform law. Conservatives then pushed back on that conclusion arguing that the loss was not a disaster for shareholders given the size and profitability of the bank overall, and that therefore policy makers shouldn’t overreact with more stringent regulation.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=70962&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">TIME.com</media:title>
		</media:content>
	</item>
		<item>
		<title>Two More Fed Nominees Blocked: A Missed Chance for Obama</title>
		<link>http://swampland.time.com/2012/05/07/two-more-fed-nominees-blocked-a-missed-chance-for-obama/</link>
		<comments>http://swampland.time.com/2012/05/07/two-more-fed-nominees-blocked-a-missed-chance-for-obama/#comments</comments>
		<pubDate>Mon, 07 May 2012 17:17:43 +0000</pubDate>
		<dc:creator>Adam Sorensen</dc:creator>
				<category><![CDATA[Barack Obama]]></category>
		<category><![CDATA[Congress]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Senate]]></category>
		<category><![CDATA[White House]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=70535</guid>
		<description><![CDATA[Two years ago, in April of 2010, President Obama nominated economist Peter Diamond to the board of the Federal Reserve. Four months later, after Republicans in the Senate blocked his appointment, Obama nominated him again. After almost a full year of waiting, Diamond gave up and withdrew his name from consideration last summer. Republicans&#8217; complaint: Diamond, who won the Nobel Memorial Prize while waiting by the phone to hear about his appointment, didn&#8217;t have the monetary chops to serve at the central bank. The reality:  Republicans in Congress want to deny Obama the ability to appoint any nominee who believes that the Fed should try to affect employment, one half of the bank&#8217;s dual mandate. It&#8217;s still happening. On Monday, Louisiana Senator David Vitter placed a hold on Obama&#8217;s latest two Fed nominees, Jerome Powell and Jeremy Stein, tossing them into the same limbo where Diamond lived for two years and making it unlikely they&#8217;ll be confirmed by year&#8217;s end. &#8220;I refuse to provide Chairman Bernanke with two more rubber stamps who approve of the Fed&#8217;s activist policies,&#8221; Vitter said. But perhaps more curious than Senate intransigence on this issue is Obama&#8217;s decision&#8211;ongoing for years now&#8211;not to respond to this problem with urgency. After all, he wielded recess appointments to bolster what he saw as some of his most important accomplishments as President: a health care entitlements chief in Don Berwick and a director, Richard Cordray, for his new financial consumer protection agency. But nothing is more important to Obama&#8217;s presidency, to his re-election and to the American people than the economy. And believe it or not, these two nominations are Obama&#8217;s last remaining tools to influence U.S. economic policy. There&#8217;s no need to get too technical here. Fiscal policy requires Congress&#8217;s cooperation. Barring disaster-dodging like 2011&#8242;s debt-ceiling deal and impending wrangling over the Bush tax cuts, that&#8217;s a non-starter: Republicans aren&#8217;t willing to vote for fiscal stimulus, full stop. Monetary policy is also largely out of Obama&#8217;s hands&#8211;that power lies with Ben Bernanke at the Federal Reserve. But Bernanke does respond to<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=70535&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://swampland.time.com/2012/05/07/two-more-fed-nominees-blocked-a-missed-chance-for-obama/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Senate</primary_category><primary_category_link>http://swampland.time.com/category/congress/senate/</primary_category_link>
		<media:content url="http://1.gravatar.com/avatar/7666b70a5b0305bd59953f5bca02cce5?s=96&#38;d=http%3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">Adam Sorensen</media:title>
		</media:content>
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		<item>
		<title>Chairman Eeyore: Bernanke&#8217;s Dour Outlook Explained</title>
		<link>http://swampland.time.com/2012/03/26/chairman-eeyore-bernankes-dour-outlook-explained/</link>
		<comments>http://swampland.time.com/2012/03/26/chairman-eeyore-bernankes-dour-outlook-explained/#comments</comments>
		<pubDate>Mon, 26 Mar 2012 18:24:45 +0000</pubDate>
		<dc:creator>Adam Sorensen</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=68240</guid>
		<description><![CDATA[Ben Bernanke and the Federal Reserve have been taking some big leaps in recent months: policy prescriptions tied to explicit dates, dire warnings to Congress, open press conferences, college lectures and even a Twitter feed. So while it&#8217;s still natural to expect characteristic caution from the Fed chairman, it&#8217;s not impossible to imagine him breaking out of character. That&#8217;s exactly what Betsey Stevenson and Justin Wolfers urged him to do a while back in a great column explaining Bernanke&#8217;s options for talking about economic outlook this year: As the recovery picks up, Bernanke might remain bearish on the state of things, pointing to still-troubling signs in the data to signal that the central bank will keep interest rates low for an extended period&#8211;this would be the Eeyore strategy, they wrote, named for the sad sack donkey from Winnie the Pooh. Or, like optimistic Tigger, Bernanke might throw caution to the wind and talk up the recovery, encouraging businesses to invest while promising to hold interest rates down for an extended period, no matter how much the economy heats up. In a Monday speech at the National Association for Business Economics, Bernanke made clear which way he&#8217;s going. &#8220;A wide range of indicators suggests that the job market has been improving, which is a welcome development indeed,&#8221; Bernanke said. &#8220;Still, conditions remain far from normal, as shown, for example, by the high level of long-term unemployment and the fact that jobs and hours worked remain well below pre-crisis peaks, even without adjusting for growth in the labor force. Moreover, we cannot yet be sure that the recent pace of improvement in the labor market will be sustained.&#8221; And so &#8220;further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies,&#8221; he concluded. What does that mean? Eeyore strategy is in effect. Now, Bernanke might actually be more pessimistic than other forecasters on the near-term job market. He said unemployment won&#8217;t be<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=68240&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://swampland.time.com/2012/03/26/chairman-eeyore-bernankes-dour-outlook-explained/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">Adam Sorensen</media:title>
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		<title>Ben Bernanke Warns Congress in Its Own Language</title>
		<link>http://swampland.time.com/2012/02/29/ben-bernanke-warns-congress-in-its-own-language/</link>
		<comments>http://swampland.time.com/2012/02/29/ben-bernanke-warns-congress-in-its-own-language/#comments</comments>
		<pubDate>Wed, 29 Feb 2012 22:39:04 +0000</pubDate>
		<dc:creator>Adam Sorensen</dc:creator>
				<category><![CDATA[Congress]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[ben bernanke]]></category>
		<category><![CDATA[federal reserve]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=66897</guid>
		<description><![CDATA[There&#8217;s &#8220;a massive fiscal cliff&#8221; in our future, Ben Bernanke told the House Financial Services Committee on Wednesday. To anyone accustomed to breathless congressional debate, this metaphorical escarpment must sound familiar. Someone once tried to push Granny off it. The nation has teetered on its edge countless times, one pork-laden bill away from taking the plunge to European Socialism. But for the usually reserved Fed Chairman, this was no empty exaggeration. Bernanke is scared. And it&#8217;s Congress that&#8217;s scaring him. For most of his testimony, Bernanke was his usual subdued self. &#8220;The recovery of the U.S. economy continues, but the pace of expansion has been uneven and modest by historical standards,&#8221; was about as dark as he got. The housing market and European crisis remain reasons for caution, he said, but they weren&#8217;t the cause of his precipice panic. Nor were spiraling deficits and debt. Quite the opposite: Bernanke is worried that spending cuts and tax hikes could strangle the recovery in its crib. (MORE: Ben Bernanke Bites Back) “Under current law, on January 1, 2013, there&#8217;s going to be a massive fiscal cliff of large spending cuts and tax increases,” he said in reference to the expiring Bush tax cuts and $1.2 trillion in spending reduction, set in motion by last year&#8217;s debt ceiling deal. &#8220;I hope that Congress will look at that and figure out ways to achieve the same long-run fiscal improvement without having it all happen at one date.&#8221; It&#8217;s not news that Bernanke is a fiscal scold, encouraging lawmakers to juice the economy with tax cuts and spending in combination with the Fed&#8217;s limited monetary tweaking, while warning against short-term austerity. But his drastic warning about the &#8220;cliff&#8221; was something different. In Washington, a reference to &#8220;current law&#8221; typically doesn&#8217;t take into account what Congress almost always does: act on stuff on which everyone agrees. Republicans obviously aren&#8217;t keen on letting the Bush tax cuts expire and Obama&#8217;s central campaign promise was not to raise taxes on families making less than $250,000 a year, so<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=66897&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://swampland.time.com/2012/02/29/ben-bernanke-warns-congress-in-its-own-language/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link><featured_image>http://timeswampland.files.wordpress.com/2012/02/sl_bernankeiii_0301_blog.jpg?w=200</featured_image>
		<media:thumbnail url="http://timeswampland.files.wordpress.com/2012/02/sl_bernankeiii_0301_blog.jpg?w=200" />
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			<media:title type="html">sl_bernankeIII_0301_blog</media:title>
		</media:content>

		<media:content url="http://1.gravatar.com/avatar/7666b70a5b0305bd59953f5bca02cce5?s=96&#38;d=http%3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D96&#38;r=G" medium="image">
			<media:title type="html">Adam Sorensen</media:title>
		</media:content>
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		<title>The Federal Reserve&#8217;s Rule-Making Secrecy</title>
		<link>http://swampland.time.com/2012/02/21/the-federal-reserves-rule-making-secrecy/</link>
		<comments>http://swampland.time.com/2012/02/21/the-federal-reserves-rule-making-secrecy/#comments</comments>
		<pubDate>Tue, 21 Feb 2012 19:28:08 +0000</pubDate>
		<dc:creator>Massimo Calabresi</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[federal reserve]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=66217</guid>
		<description><![CDATA[The Wall Street Journal has a thoroughly reported story today on the rise in regulatory secrecy at the Federal Reserve. On 45 of 47 of the draft or final regulatory measures voted on by members since the passage of the Dodd-Frank financial reform bill in July 2010, the Fed&#8217;s five voting members have e-mailed their votes in, rather than holding the votes in public meetings. The lack of public meetings is a change from the past: In the 1980s and 1990s public voting on regulatory issues were more frequent. The Fed has been making an effort to appear more open in other decision making areas recently, holding regular press conferences and increasing the information it releases about its monetary policy decisions. But this new show of transparency hasn&#8217;t extended to regulation. The Fed is currently working on 250 rule-writing projects, the Journal reports. Daniel Tarullo, a Fed governor appointed by President Barack Obama and in charge of the rule-writing effort, told the Journal open meetings aren&#8217;t always good. &#8220;You can have a scripted meeting that does not show any engagement at all,&#8221; he said. MORE: The Street Fighter<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=66217&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://swampland.time.com/2012/02/21/the-federal-reserves-rule-making-secrecy/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">calabresim</media:title>
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		<title>Is the Fed Undermining the Recovery?</title>
		<link>http://business.time.com/2012/01/26/is-the-fed-undermining-the-recovery/</link>
		<comments>http://business.time.com/2012/01/26/is-the-fed-undermining-the-recovery/#comments</comments>
		<pubDate>Thu, 26 Jan 2012 12:49:31 +0000</pubDate>
		<dc:creator>Stephen Gandel</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=64540</guid>
		<description><![CDATA[Ben Bernanke is playing chicken with the real economy. By most measures the economy in the past few months seems to be improving. The unemployment rate has been falling. Manufacturing appears to be perking up. U.S. car companies are back in business. And home sales even rose in December. Yet, on Wednesday, the U.S. central bank said that it plans to keep short-term interest rates near zero until at least late 2014.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=64540&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">TIME.com</media:title>
		</media:content>
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		<title>Obama (Finally) Looks to Fill Empty Fed Seats</title>
		<link>http://swampland.time.com/2011/12/27/obama-finally-looks-to-fill-empty-fed-seats/</link>
		<comments>http://swampland.time.com/2011/12/27/obama-finally-looks-to-fill-empty-fed-seats/#comments</comments>
		<pubDate>Tue, 27 Dec 2011 22:17:31 +0000</pubDate>
		<dc:creator>Adam Sorensen</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=61922</guid>
		<description><![CDATA[Way back in April 2010, Obama nominated three economists to fill out empty seats on the Federal Reserve&#8217;s board of governors. Two sailed through, but one, Peter Diamond, was snared in the net of the Senate, where Republican Richard Shelby was unconvinced of the Nobel-winner&#8217;s monetary bona fides. After a long back-and-forth, Diamond withdrew in June 2011, some six months after yet another spot on the Fed had been vacated. The result: For the better part of a year, there&#8217;s been two empty seats at the central bank and no candidates to fill them. On Tuesday, President Obama named two candidates to fill these spots: Harvard economist Jeremy Stein, who served the current Administration at the Treasury Department  in 2009, and Jerome Powell, a former undersecretary for domestic finance under George H.W. Bush. The Journal has the story and there&#8217;s already some commentary on the merits of the picks, but one thing that shouldn&#8217;t go unmentioned is this: The economy remains fragile, fiscal policy is still mired in Congress and the Euro crisis looms large over the U.S. recovery. That puts a lot of weight on American monetary policy at this particular moment and it&#8217;s amazing that Obama went so long without filling vacant spots on the board, even if decision-making ultimately falls to chairman Ben Bernanke. We&#8217;ll find out more about Stein and Powell&#8217;s monetary policy positions during their Senate confirmation hearings, which should prove easier than what Diamond faced. In the mean time, it&#8217;s news enough that someone&#8217;s finally been nominated.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=61922&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://swampland.time.com/2011/12/27/obama-finally-looks-to-fill-empty-fed-seats/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">Adam Sorensen</media:title>
		</media:content>
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		<title>Ben Bernanke Bites Back</title>
		<link>http://swampland.time.com/2011/12/07/ben-bernanke-bites-back/</link>
		<comments>http://swampland.time.com/2011/12/07/ben-bernanke-bites-back/#comments</comments>
		<pubDate>Wed, 07 Dec 2011 18:02:32 +0000</pubDate>
		<dc:creator>Massimo Calabresi</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[ben bernanke]]></category>
		<category><![CDATA[bloomberg]]></category>
		<category><![CDATA[financial crisis]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=61000</guid>
		<description><![CDATA[Last week I drew attention to a Bloomberg analysis of documents obtained through the Freedom of Information Act that said that if you "add up guarantees and lending limits... the Fed had committed $7.77 trillion" to rescuing the financial system during the credit crisis in 2008. It turns out Bloomberg and I were both unjustifiably gigging the Paulites' collective dander, or at least that's what the bunker-busting Bernanke says. <img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=61000&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">calabresim</media:title>
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		<title>Fed Keeps Trying to Save Europe&#8217;s Banks; Ron Paul Frowns</title>
		<link>http://swampland.time.com/2011/11/30/fed-keeps-trying-to-save-europes-banks-ron-paul-frowns/</link>
		<comments>http://swampland.time.com/2011/11/30/fed-keeps-trying-to-save-europes-banks-ron-paul-frowns/#comments</comments>
		<pubDate>Wed, 30 Nov 2011 17:16:56 +0000</pubDate>
		<dc:creator>Massimo Calabresi</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[ron paul]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=60350</guid>
		<description><![CDATA[Last week I noted the spike in ECB drafts on the Fed&#8217;s swap lines, which were reopened in May 2010 to help keep dollar liquidity flowing as Europe entered its sovereign debt crisis. This morning the major central banks, including the Fed, ECB, and the Banks of Japan, England, Switzerland and Canada, announced that as of Dec. 5, 2011 they&#8217;ll reduce the already nominal interest they charge for the dollars drawn off the swaps by banks in their countries, and extend the swap lines through February 2013. The markets have reacted with great joy to the news: the S&#38;P is up 3.5% and the Dow&#8217;s up 3.6%, as investors take the coordinated action as an indication that the Central Banks are willing to do more to save the Euro. In particular, investors may hope (dream?) that the central banks would be willing to prop up the Euro, a move discussed elsewhere earlier this week. Not everyone is wild about the idea of reducing the interest rates on dollars worldwide, though. There are some who think that a world economy that runs on untethered credit is a bad thing: Islamic fundamentalists, for example, who believe usury is a crime, or Ron Paul, who opposes the liquidity back stop that the Fed was created to provide. That backstop, of course, saved the world in the fall of 2008 by ultimately providing $7.7 trillion in loans to keep the circulatory system of the world economy (that is, credit) moving, so that the world economy could continue to function. The Fed points out that it has not lost a single penny on those loans. Paul told CNBC this morning that reduction of interest rates on dollars drawn off the swap lines amount to U.S. taxpayers buying Greek debt . That&#8217;s not true, of course: the dollar-Euro swaps have fixed maturities ranging from 7 to 84 days, and the Europeans pay the Fed interest when they swap the Euros and give us dollars back. But why let a few facts get in the way of<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=60350&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
		<wfw:commentRss>http://swampland.time.com/2011/11/30/fed-keeps-trying-to-save-europes-banks-ron-paul-frowns/feed/</wfw:commentRss>
		<slash:comments>0</slash:comments>
	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">calabresim</media:title>
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		<title>Newsflash: The Fed Saved the World</title>
		<link>http://swampland.time.com/2011/11/28/newsflash-the-fed-saved-the-world/</link>
		<comments>http://swampland.time.com/2011/11/28/newsflash-the-fed-saved-the-world/#comments</comments>
		<pubDate>Mon, 28 Nov 2011 17:27:15 +0000</pubDate>
		<dc:creator>Massimo Calabresi</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=60238</guid>
		<description><![CDATA[Bloomberg has a well-researched story out today based on a massive Freedom of Information Act inspection of the Fed’s lending during the financial crisis from August 2007 through April 2010. The headline-making numbers: In sum, the Fed gave the banks more than $7.7 trillion in loans, and banks may have made $13 billion in part thanks to those loans. The piece spends a lot of time touting the amounts of money that went to different banks: Bank of American owed the Fed $86 billion on Nov. 26, 2008, the day then CEO Ken Lewis told shareholders his bank was strong and stable; Morgan Stanley took $107 billion loans in Sept. 2008. And the story seems to be in search of outrage: “This is an issue that can unite the Tea Party and Occupy Wall Street,” says Ohio Democratic Senator Sherrod Brown. But the Fed saved the world economy through all this lending without losing a penny in the process. And after its initial heavy breathing, the article does give the Fed an opportunity to explain itself. “Supporting financial-market stability in times of extreme market stress is a core function of central banks,” says William B. English, director of the Fed’s Division of Monetary Affairs. “Our lending programs served to prevent a collapse of the financial system and to keep credit flowing to American families and businesses.” In other words, lending money to banks in a crisis is the whole point of the Fed: saving the world economy by flooding the system with money when it is about to freeze up is exactly what the central bank was created to do. If you don’t like it, then vote for Ron Paul and see what a world without the Fed looks like. Buried beneath the attempts to tap public outrage is a larger point, which is that reforming Wall Street to avoid a similarly catastrophic crisis in the future would have been easier if all the information obtained, compiled and explained by Bloomberg&#8217;s reporters had been out there sooner. Dodd-Frank mandates that<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=60238&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">calabresim</media:title>
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		<title>Can the Fed Help Save Europe’s Banks?</title>
		<link>http://swampland.time.com/2011/11/22/can-the-feds-billions-help-save-europes-banks/</link>
		<comments>http://swampland.time.com/2011/11/22/can-the-feds-billions-help-save-europes-banks/#comments</comments>
		<pubDate>Tue, 22 Nov 2011 10:00:18 +0000</pubDate>
		<dc:creator>Massimo Calabresi</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=60015</guid>
		<description><![CDATA[The U.S. Federal Reserve has been pumping billions of dollars into the European banking system in recent weeks in an attempt to help stabilize the continent’s financial crisis. And while the effort remains small, it is likely to grow in coming days as Europe’s banks struggle to find lenders willing to help them service their dollar denominated debts. The Fed’s effort has two parts. The largest by far is its provision of dollars through swap lines the Fed opened to other central banks around the world during the 2008 financial crisis, and reopened in May 2010 when the European sovereign debt crisis blew up. According to the agreement [PDF] signed between the New York Fed and the European Central Bank, the ECB can swap Euros for dollars at a fixed exchange rate and repay the Fed with nominal interest at an agreed upon date. For months the swap lines remained idle, but last September the European Central Bank announced it would tap them to help provide dollars to banks in Europe, and it began rolling over about $500 million worth of swaps every 7 days at a little over 1% annualized interest. In mid-October the ECB increased its swaps, drawing $1.35 billion for three months, while continuing to rollover the previous $500 million. Over the following weeks it swapped another $1 billion in 1-week and three-month paper, bringing the outstanding total to $2.35 billion as of Nov. 16. That is a tiny amount in the multi-trillion dollar world of transatlantic money flows, and it shows that in some ways the Fed move to ensure its vast store of dollars are available to the European banks through this channel is working. “The hope is that when you put the big bazooka [of Fed dollars] on the table that you don’t have to use it,” the source says. But the uptick in swap line use shows it is becoming harder for European banks to get their hands on dollars from lenders, and suggests, as the source says, that at some point the<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=60015&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link><featured_image>http://timeswampland.files.wordpress.com/2011/11/sl_fedeuro_1121_blog.jpg?w=200</featured_image>
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			<media:title type="html">calabresim</media:title>
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		<title>Rebranding the Federal Reserve&#8217;s Printing Presses as Economic Rejuvenators</title>
		<link>http://swampland.time.com/2011/10/31/rebranding-the-federal-reserves-printing-presses/</link>
		<comments>http://swampland.time.com/2011/10/31/rebranding-the-federal-reserves-printing-presses/#comments</comments>
		<pubDate>Mon, 31 Oct 2011 14:54:09 +0000</pubDate>
		<dc:creator>Michael Scherer</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[christina romer]]></category>
		<category><![CDATA[paul krugman]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=58790</guid>
		<description><![CDATA[On Sunday, the Obama Administration&#8217;s former top economist, Christina Romer, put to paper an idea she has been bandying about for a while: The Federal Reserve, she argues, should restate its mission and commit to returning the U.S. economy to its pre-recession path, as measured by nominal GDP, or the size of the economy before accounting for inflation. In practice, this would commit Ben Bernanke to seeking out higher rates of inflation in the short term, at least until the economy catches up to its previous trajectory and starts growing at a healthy rate again. But the genius of Romer&#8217;s plan, at least for those who see it as genius, is that it doesn&#8217;t sound like a plan to raise inflation in the short term. It sounds like a plan to get the economy growing again. The economic crises got the nation off track, she reasons, so the Federal Reserve should get it back on track.Such a strategy has been used before, Romer argues. In the late 1970s and early 1980s, the U.S. economy faced another problem, runaway inflation. To respond, then Fed Chairman Paul Volcker publicly announced that he would set a targeted rate of monetary growth, sending a clear signal that 10% inflation would have to go one way or another. Economic behavior changed, the American people suffered through a recession, and those high rates of inflation have not been seen since. In Romer&#8217;s view, a similar communications strategy in the other direction could have a similar effect. By committing to higher inflation until the economy started growing, nominally, on the same path it was on pre-crisis, the expectations of investors and consumers would shift. The rub comes in just how the Federal Reserve would meet this new target of increasing inflation to make up for a lack of normal economic growth. Romer explains: Though announcing the new framework would help, it probably wouldn’t be enough to close the nominal G.D.P. gap anytime soon. The Fed would need to take additional steps. These might include further quantitative easing,<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=58790&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link><featured_image>http://timeswampland.files.wordpress.com/2011/10/sl_romer_1031_blog.jpg?w=200</featured_image>
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			<media:title type="html">michaelscherer</media:title>
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		<title>Republicans Are Right to Pressure the Fed, Even If What They Want Is Wrong</title>
		<link>http://swampland.time.com/2011/09/21/republicans-have-every-right-to-pressure-the-fed-to-kill-jobs-and-help-republicans/</link>
		<comments>http://swampland.time.com/2011/09/21/republicans-have-every-right-to-pressure-the-fed-to-kill-jobs-and-help-republicans/#comments</comments>
		<pubDate>Wed, 21 Sep 2011 16:06:53 +0000</pubDate>
		<dc:creator>Michael Grunwald</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[gop]]></category>
		<category><![CDATA[monetary policy]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=56477</guid>
		<description><![CDATA[Monetary policy is dull, so the Republican Party&#8217;s bizarre advocacy of job-killing tight-money policies during a jobs crisis hasn&#8217;t gotten much attention. But political food fights are exciting, so today&#8217;s letter from GOP leaders pressuring Federal Reserve chairman Ben Bernanke not to approve more monetary stimulus is likely to get a lot of attention. The Fed is independent, and according to tradition, politicians aren&#8217;t supposed to try to push it around. But why not? Politicians have every right to tell Bernanke what they think he should do. Bernanke has every right to ignore them. The Fed ought to be more central to our politics, not less. It&#8217;s our most important economic institution; the economy is our most important political issue. And the GOP&#8217;s ignorant and cynical efforts to prevent the Fed from juicing the economy before 2012 deserve a larger hearing. (PHOTOS: Ben Bernanke&#8217;s Life in Photos) A quick primer for normal people who don’t follow monetary policy: The Fed has a dual mandate to stabilize prices and maximize employment.  In general, tighter monetary policies reduce inflation and reduce employment, putting the brakes on the economy; looser policies apply the gas, increasing inflation and increasing employment. Right now, inflation is low and unemployment is appallingly high. So those of us on the “dovish” side want the Fed to focus on promoting job creation, even if that means slightly higher inflation; as I’ve been writing for a year, a little inflation can be a good thing, because it encourages businesses to invest and hire rather than hoard their cash. For all the right-wing screeching about how President Obama and Bernanke are “debasing the currency,” core inflation is still less than half what it was during its lowest ebb during the term of the great inflation-basher Ronald Reagan. (MORE: Bernanke Embraces Obama&#8217;s Reality-Based Presidency) But inflation hawks really don’t like inflation. Some hawks think a little inflation will inevitably lead to hyperinflation, as if the Fed would suddenly forget how to raise interest rates if the economy overheated. Some hawks don’t like<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=56477&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">michaelgrunwald</media:title>
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		<title>The Fed Is Debating Whether to Give the Economy Another Jolt: Does Obama Care?</title>
		<link>http://swampland.time.com/2011/07/13/the-fed-is-debating-giving-the-economy-another-jolt-does-obama-care/</link>
		<comments>http://swampland.time.com/2011/07/13/the-fed-is-debating-giving-the-economy-another-jolt-does-obama-care/#comments</comments>
		<pubDate>Wed, 13 Jul 2011 19:28:45 +0000</pubDate>
		<dc:creator>Adam Sorensen</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[bernanke]]></category>
		<category><![CDATA[Congress]]></category>
		<category><![CDATA[monetary policy]]></category>
		<category><![CDATA[obama]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=52215</guid>
		<description><![CDATA[The most important news to emerge from the Federal Reserve&#8217;s June meeting and Chairman Ben Bernanke&#8217;s Wednesday testimony before Congress is that the central bank is open to taking further action to juice the economy if the recovery remains stalled, and that the Federal Open Market Committee is divided on what to do. Another round of bond-buying, known as quantitative easing, remains unlikely and any final decision lies with the cautious Bernanke, who expressed uncertainty that the economic benefits of further stimulus would outweigh the risks. I&#8217;ll let others mull the potential efficacy of QE3 and pose a slightly different question: Does any of this matter to President Obama? If anyone has a stake in the economic vitality of the nation, it&#8217;s Obama. Let&#8217;s go ahead and assume that the President believes the following: A second term is desirable and the economy is a significant variable in his re-election. The stalled recovery can&#8217;t be 100% explained by transitory effects or structural shortcomings. Barring extensions of a payroll tax cut and unemployment benefits, Congress is unlikely to enact further fiscal stimulus and the President&#8217;s hands are tied. And expansionary monetary policy has a potential to improve economic outlook. Given those beliefs and the assumption that there&#8217;s negligible domestic political drawbacks to the enactment of further Fed action &#8212; global politics is a very different story &#8212; why wouldn&#8217;t Obama be interested in giving monetary stimulus full hearing? By that I mean: Why is Obama comfortable with leaving two long-vacant seats on the Fed&#8217;s Board of Governors to gather dust? As the failed nomination of Peter Diamond showed, the confirmation process is not a quick or easy one. Any change would take months. But there is a plausible scenario in which a divided FOMC weighs action in the face of continued economic lethargy later this year or next. &#8220;The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support,&#8221; Bernanke told Congress on Wednesday. If that<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=52215&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">Adam Sorensen</media:title>
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		<title>Bernanke: Everything’s Going to be Fine. Maybe.</title>
		<link>http://swampland.time.com/2011/06/22/bernanke-everything%e2%80%99s-going-to-be-fine-maybe/</link>
		<comments>http://swampland.time.com/2011/06/22/bernanke-everything%e2%80%99s-going-to-be-fine-maybe/#comments</comments>
		<pubDate>Wed, 22 Jun 2011 19:51:23 +0000</pubDate>
		<dc:creator>Massimo Calabresi</dc:creator>
				<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[ben bernanke]]></category>

		<guid isPermaLink="false">http://swampland.time.com/?p=50778</guid>
		<description><![CDATA[You know things are bad when even the optimists sound unsure about the future. The Federal Open Market Committee came out with more negative predictions for inflation, economic growth and unemployment today, but still said that by the end of 2013 everything should be much better than it is now. However, at his second-ever press conference this afternoon, Fed Chairman Ben Bernanke was murky about the basis for that hope, and said some fairly pessimistic things to boot. In their latest guidance, the FOMC said inflation would come down below 2% by the end of 2013, unemployment would drop as low as 7% and growth would get close to 4% by the end of 2012. Those numbers are slightly less positive than after the last projections in April but still rosier than many on Wall Street expect. Bernanke at his press conference defended those numbers. But he admitted that Fed economists were unsure about how much of the economic weakness was due to transitory factors, like the disaster in Japan and the spike in oil prices, as opposed to larger issues in the housing and financial sectors. “We don’t have a precise read on why this slower pace of growth is persisting,” Bernanke said, while restating the Feds insistence that their best guess is that it won’t. Bernanke also painted a fairly bleak picture of what could happen if Greece’s crisis continued unchecked and said that the Fed, in its role as regulator of systemically important banks had asked them to do stress tests to find out what the effects would be if Greece defaulted on its loans. “The answer is the effects would be very small,” he said, but it “could roil the markets so in that respect the effects in the U.S. would be quite significant.” Bernanke also warned Congress and the administration not to cut the deficit aggressively in the short term, which he said could boost unemployment, but should instead focus on lowering the debt over the course of the next decade. He said short-term belt-tightening<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=swampland.time.com&#038;blog=5284847&#038;post=50778&#038;subd=timeswampland&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Federal Reserve</primary_category><primary_category_link>http://swampland.time.com/category/domestic-policy-2/federal-reserve-domestic-policy/</primary_category_link>
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			<media:title type="html">calabresim</media:title>
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