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Federal Reserve on Interest Rates, Treasuries, and Unemployment
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by candice.tsuei | August 12, 2009 at 02:48 pm
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Federal Reserve policymakers ended their two-day meeting of the Federal Open Markets Committee (FOMC) and issued a statement in Washington. It has decided to keep its benchmark interest rates unchanged between 0% and 0.25%, slow down its $300-billion U.S. Treasuries program, and said that while "economic activity is likely to remain weak for a time," it had begun to "level off."
"They see the worst with the economy is behind us but they don't want to jump the gun and pull back quickly," said Craig Thomas, PNC Financial's senior economist. "But they no longer have to be as aggressive with quantitative easing, which I think is a positive."
The US interest rates were as high as 5.25% back in September 2007, then the rates were cut to the current level of between 0 to 0.25% in December 2008, and have remained ever since.
The central bank added that the current low levels of interest rates will likely continue "for an extended period" to aid the continuing recovery.
The US unemployment rate fell to 9.4% in July with 247,000 job cuts, doing far better than what analysts had expected. Although job losses, along with sluggish income growth, lower housing wealth and tight credit, still put pressure on household spending, we are beginning to see glimpse of hope.
Other recent official figures showed that US consumer spending had risen in June for a second successive month, while worker productivity had increased at its fastest annual pace for nearly six years in the second quarter of 2009.
On June 24, the Fed announced that it would buy up to $300 billion of long-term U.S. Treasuries "by autumn." Two months later, the Fed said in the report that it will "gradually slow the pace of the transactions and anticipates the full amount will be purchased by November," a month later than previously stated.
The Federal Reserve did not alter its plan to buy up to US $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year, a key part of its efforts to improve conditions in private credit markets.
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Thomas Jefferson (not verified)at 17:38 on September 4th, 2009
What is the Federal Reserve and Who Controls it?
The Federal Reserve is not a governmental agency and neither the Congress nor the President have one iota of control over its day-to-day operations. The chilling truth is that the Federal Reserve, America's central bank, is simply one component of an interlocking, international banking cartel that now controls the wealth of this planet. The ownership of the largest blocks of bank voting stock are in nominee accounts, numbered accounts or trust accounts.
The Federal Reserve creates inflation when it issues U.S. dollars backed by government debt. The U.S. dollar has lost 96% of its purchasing power due to inflation from 1913 to 2001. The more "money" the Federal Reserve creates - the less your Federal Reserve "money" will buy. Americans had experienced no significant inflations nor deflations nor stagflations nor other "booms nor busts", such as we have all experienced until sometime after the enactment of The Federal Reserve Act except those caused by banks.
"We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it." - Congressman Louis T. McFadden
Any genuine reform of the U.S. monetary system must include two basic elements: fractional reserve lending must be prohibited, and private banks must be forbidden from creating money, whether as loans or otherwise. The Monetary Reform Act does both. It also incorporates means of doing this that include paying off the huge national debt, and stabilizing the economy.