Tag: Federal Reserve

Census, Fed Data on Minorities Challenge Critical Race Theory Narratives of White Suppression

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Minorities have increased their mobility and financial standing over the last decade, according to federal data that challenges some of the narratives of the so-called Critical Race Theory spreading through schools and media.

While the Federal Reserve reports that “the typical white family has eight times the wealth of the typical black family and five times the wealth of the typical Hispanic family” it also acknowledges that African-American and Hispanic families have made significant gains.

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Key Inflation Measure Spikes Again, Hits Highest Level Since 1991

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Person in white shirt, walking into Gap store

A consumer price measurement used by the Federal Reserve to track inflation spiked again in June and hit its highest level since 1991, government data showed.

The personal consumption expenditures (PCE) price index increased 4% over the 12 months between July 2020 and June, according to a Bureau of Economic Analysis report released Friday. Excluding volatile energy and food prices, the index spiked 3.5% in that same 12-month period.

The index increased 0.5% in June, in line with economists’ forecasts, CNBC reported.

“Inflation has increased notably and will likely remain elevated in coming months before moderating,” Federal Reserve Board Chair Jerome Powell said during a press conference this week. “As the economy continues to reopen and spending rebounds, we are seeing upward pressure on prices, particularly because supply bottlenecks in some sectors have limited how quickly production can respond in the near term.”

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Federal Reserve Chair: Inflation to be ‘Elevated for Months’

The Center Square
Jerome Powell

Federal Reserve Chairman Jerome Powell tried to calm lawmakers’ fears about rising inflation but also said it would probably remain elevated for months to come.

Testifying before Congress this week, Powell said the Federal Reserve was willing to step in to address the situation, but that inflation should level out next year.

“As always, in assessing the appropriate stance of monetary policy, we will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if we saw signs that the path of inflation or longer-term inflation expectations were moving materially and persistently beyond levels consistent with our goal,” Powell said in his prepared testimony.

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Red States Top Those with Lowest Unemployment Rates

The Center Square
"Come in, we're hiring!"

Republican-led states and Vermont reported the lowest unemployment rates in April, according to a new report by the U.S. Commerce Department. States led by Democratic governors recorded the highest jobless rates, according to the report.

Unemployment rates were lower in April in 12 states and the District of Columbia and stable in 38 states, according to the U.S. Bureau of Labor Statistics.

States with the highest unemployment rates in April were Hawaii (8.5%), California (8.3%), New Mexico and New York (both at 8.2%), and Connecticut (8.1%). All five states with the highest unemployment are run by Democratic trifectas, meaning Democrats control the governor’s office and both houses of the state legislature.

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Senate Republicans Expand Investigation into ‘Woke Mission Creep’ of Federal Reserve

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Federal Reserve

Senate Banking Committee Republicans have expanded an investigation into regional Federal Reserve banks over their alleged “woke mission creep.”

Republicans on the Senate Banking Committee sent letters to regional Federal Reserve banks in Minneapolis, Boston and Atlanta demanding a briefing with leaders and documents related to a recent “Racism and the Economy” initiative, GOP staffers said during a press briefing Monday morning. Engaging in political advocacy is out of the Fed’s purview, the letters said.

“Of course, racism is abhorrent and has no place in our society…. I recognize the interest in studying economic disparities along demographic lines, such as race and gender,” Banking Committee Ranking Member Pat Toomey wrote in the letters sent Sunday.

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Inflation Increasing Quicker Than Expected, Former Treasury Secretary Larry Summers Says

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Larry Summers

Top American economist Larry Summers is sounding the alarm on rising U.S. inflation, saying that it is ticking up quicker than he originally expected.

Inflation is increasingly a more concerning and larger threat as consumer prices continue to rise, former National Economic Council Director and Treasury Secretary Larry Summers told Axios on Monday. He also criticized the Federal Reserve’s policies, suggesting that its decision to keep interest rates low could harm the economy.

“Data are pointing more towards higher inflation than I expected, and sooner,” Summers told Axios. “With more inflation signs sooner than I would have expected.”

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Rep. Green Introduces Bill to Open Federal Reserve Board Meetings Once More

Jason M. Reynolds

U.S. Rep. Dr. Mark Green wants the governing board of the Federal Reserve to resume meeting in public to comply with the Sunshine Act.

The CARES Act has allowed the board of governors to meet in secret for the most part, Green said. So, he and U.S. Rep. Tulsi Gabbard (D-HI-02) this week introduced the Federal Reserve Sunshine Act, HR 8007, to make the board transparent once again.

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Fed Says ‘Full Range of Tools’ in Play to Counter Pandemic

The Associated Press

The Federal Reserve is promising to use its “full range of tools” to pull the country out of a recession brought on by a global pandemic, signaling that it would keep interest rates low through 2022.

In its semi-annual monetary policy report to Congress, the central bank said Friday that the COVID-19 outbreak was causing “tremendous human and economic hardship across the United States and around the world.”

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Commentary: If Larger States Remain Closed, America May Need a Bank Debt Holiday to Avert Another Financial Crisis

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Another 5.2 million Americans filed for initial unemployment claims last week, bringing the total number of jobs lost to the Chinese coronavirus and related government closures to anywhere from 21.8 million to 24.8 million jobs lost in about one month, and when added to the 5.8 million who were already jobless, produces an effective unemployment rate of 16.7 to 18.5 percent.

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Commentary: The U.S. Economy Will Weather the Chinese Coronavirus

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American Spirit

President Donald Trump praised the Federal Reserve for cutting the federal funds rate to a range of 0 percent to 0.25 percent, and restarting quantitative easing with $500 billion of U.S. treasuries purchases and $200 billion of mortgage purchases in response to the Chinese coronavirus global pandemic.

“It makes me very happy and I want to congratulate the Federal Reserve,” he said. “That’s a big step and I’m very happy they did it.” Trump has been hounding the Fed for years to cut interest rates to make the dollar more competitive against trading partners’ currencies including the yuan, euro and peso. Now he gets his wish.

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Commentary: Is the Federal Reserve Trying to Cause a Recession before 2020?

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by Robert Romano   Did anyone notice the Fed inverted the yield curve? On May 23, the 10-year Treasury dipped below the federal funds rate, the benchmark interest rate set by the Federal Reserve that it currently has set for a range of 2.25 percent to 2.5 percent, and has stayed there since. As of June 4, the effective federal funds rate was 2.38 percent, while the 10-year is at 2.13 percent. There were also brief inversions on March 28 and May 15, but they immediately came back into positive territory. Unlike other inverted interest rates, which often foretell a recession in not so distant future, this is one the central bank actually has control over since it sets its own rate. But, there’s no need to panic. The last time those two rates briefly inverted and then stayed inverted, beginning in late March 2006, a recession did not follow until December 2007. It took 21 months. Sometimes it takes even longer than that. The time before that, the two rates briefly inverted in Sept. 1995, but the next recession did not begin until March 2001, almost six years. Another brief inversion occurred in Dec. 1985, but the next recession…

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Commentary: We Need Supply Side Warrior Steve Moore on the Fed Board

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by George Rasley   In late March, and partly at the urging of Larry Kudlow, Director of President Trump’s National Economic Council, the President announced his intention to nominate our good friend Stephen Moore to one of the two open seats on the Federal Reserve Board of Governors. Conservatives, who believe in and support the Trump pro-growth economic agenda, were thrilled when the President announced Moore’s name – establishment “Wall Street before Main Street” types, not so much. The announcement prompted protests from economists across the ideological spectrum, reported Politico’s Ben Schreckinger, with George W. Bush’s top economist, Harvard’s Gregory Mankiw, saying Moore lacked the “intellectual gravitas” for the job and warning that appointing Moore, a think-tanker with no Ph.D., would politicize the Fed. Like appointing Janet Yellen to maintain near negative interest rates to prop-up Obama wasn’t political? To claim that Moore, who has served as top economist at the Heritage Foundation and a member of the Wall Street Journal editorial board, lacks intellectual gravitas is about the crassest exhibition of elitism we’ve seen in a long time and comes from the same place that spawned the Kevin D. Williamson article we dismembered back in 2016. And, as Mr.…

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Herman Cain’s Fed Nomination May Be Over Before It Starts

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by Whitney Tipton   Several GOP senators expressed concern Tuesday over Trump’s selection of Herman Cain for the Federal Reserve Board, casting doubt that the former GOP presidential candidate will be formally nominated. Two Republicans raising issues, Republican North Dakota Sen. Kevin Cramer and Republican South Carolina Sen. Tim Scott, are members of the Banking Committee, whose nomination hearing would be a critical step prior to full Senate chamber consideration, should Cain be formally named. “It’s hard for me to imagine he’d be confirmed,” said Cramer in comments made to reporters after a closed-door Senate GOP meeting, according to The Wall Street Journal. Cramer has questioned Cain’s fitness because of sexual harassment allegations made against him. “That’s a very big problem for me—I think for a lot of people, and rightfully so.” Scott, another Banking Committee member, downplayed the harassment issue, “That’s a part of what I need to look at.” Scott added that Cain was “obviously qualified” for the position because of his experience on the Kansas City Fed and that the “question is what is the entire portfolio of his activities and interests and challenges,” The WSJ reported. Cain, also a former pizza chain CEO and unsuccessful U.S.…

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Trump Picks Former Presidential Candidate Herman Cain for Fed Board

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U.S. President Donald Trump plans to nominate former pizza chain executive and Republican presidential candidate Herman Cain for a seat on the Federal Reserve Board, where he will help set interest rates for the world’s biggest economy. “I have recommended him highly for the Fed,” Trump said in a press conference Thursday. “I’ve told my folks that’s the man.” Trump has been a vocal and strident critic of the Fed’s rate hikes under Jerome Powell, whom the president picked two years ago to chair the U.S. central bank. Trump’s other Fed appointees have also supported the Powell Fed’s rate hikes, which the president has said hurt the economy. This year the Fed has put rate hikes on hold, citing a slowing economy and risks from overseas. Trump, meanwhile, has continued to rail against the Fed, even as he has said he will nominate conservative commentator Stephen Moore, a proponent of rate cuts, for a second vacant seat on the Fed Board. Asked if he is sending a signal to the Fed with the pair of nominations, Trump said: “None whatsoever. He’s a highly respected man. He’s a friend of mine. He’s somebody that gets it, and I hope everything goes…

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As The Fed Dumps Billions in Government and Mortgage Bonds, Questions of ‘Engineering’ a Recession Swirl as 2020 Nears

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by Robert Romano   Recession warning lights are flashing predictably after the Federal Reserve has finally ended quantitative easing – it’s now dumping $50 billion of government and mortgage bonds a month – and short-term interest rates have risen. The 10-year-3-month treasuries spread inverted on March 22, and the 10-year-2-year and the 10-year-federal-funds-rate do not appear to be far behind from inverting. When interest rates invert, it means the interest rate on short-term bonds is higher than the rate of return for long-term bonds, meaning there is slightly more demand for the long-term bonds, which are viewed as a relatively safer investment. So, how did we get here? The short answer is that since the Fed began dumping bonds back on the market – it has shed $458 billion since Sept. 2017 – short-term interest rates have been steadily rising. This usually happens anyway as the business cycle comes to a close. But what it tells you is that this particular business cycle was prolonged – by a lot – with the Fed artificially keeping short-term interest rates low, not by manipulating the benchmark federal funds rate, but through quantitative easing and then refinancing a vast horde of U.S. treasuries. The U.S. is long overdue for a recession – it…

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Trump to Nominate Stephen Moore for Fed Board

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President Donald Trump said Friday that he will nominate Stephen Moore, a conservative economic analyst, to fill a vacancy on the Federal Reserve’s seven-member board. Moore, a well-known and often polarizing figure in Washington political circles, served as an economic adviser to Trump during the 2016 presidential campaign. In that role, he helped draft Trump’s tax cut plan. Trump has been harshly critical of the Fed’s rate increases last year even after the central bank this week announced that it foresees no hikes this year. Moore, who has served as chief economist for the conservative Heritage Foundation, has also been critical of policy moves made by Chairman Jerome Powell, who was hand-picked by Trump to be Fed chairman. An ardent defender of tax cuts, Moore is close to Larry Kudlow, head of the White House National Economic Council. The two collaborated in shaping the tax overhaul that Trump signed into law at the end of 2017, leading to changes that largely favored tax cuts for corporations and wealthier Americans with the idea of spurring investment and faster growth. Reshaping Central Bank Trump in his first two years in office has been able to reshape the central bank. He nominated four…

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Commentary: The Federal Reserve Falls Short of the Rule of Law

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by Alexander Salter   “Money is power.” We’ve all heard this aphorism many times before. Too often it’s a lazy shorthand dismissal of the finding of mainstream economics, which show that the pursuit and possession of money often entails innocuous or even beneficial consequences for society. Dr. Johnson was right after all: “There are few ways in which a man can be more innocently employed than in getting money.” But there are some contexts in which the saying is apt. An obvious case is the Federal Reserve. The Fed has a monopoly on the creation of base money, the fundamental asset underlying the banking and financial system. And over decades, with each instance of financial turbulence, the Fed has become less constrained in how, when, and why it creates base money. Since the Great Recession, the Fed has been able to bestow purchasing power, liquidity, and solvency on just about any financial organization it pleases. If that isn’t power, there’s no such thing. The Federal Reserve System was created in 1913. It was intended to be a formalization of the interbank clearing system that then existed in the National Banking System. It was not intended to be a central bank.…

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Surge in US Job Creation, Fed Reassurance Boosts Stocks

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A surge in U.S. job creation and some reassuring words from the head of the U.S. central bank sent U.S. stocks soaring Friday. The Labor Department reported a net gain of 312,000 jobs in December, far more than economists predicted. The unemployment rate, however, rose slightly, to 3.9 percent. Many analysts said the rising unemployment rate was probably good news because rising wages prompted many jobless people to start looking for work. People are not counted as officially unemployed unless they have searched for work in the past four weeks. In December, the labor force expanded by a healthy 419,000 people as wages rose 3.2 percent over the past year. PNC Bank Chief Economist Gus Faucher said the data meant worries about a possible recession were probably “overblown.” Worried investors have sent stocks mostly downward in recent months in a series of drastic gains and losses driven in part by concern that the U.S. central bank might raise interest rates too quickly and choke off growth. Federal Reserve Chair Jerome Powell said Friday that Fed officials were “listening carefully” to markets that were weighing the impact of “concerns on global growth and trade negotiations.” Dec Mullarkey of Sun Life Investment…

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Commentary: Ten Great Economic Myths

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by Murray N. Rothbard   Our country is beset by a large number of economic myths that distort public thinking on important problems and lead us to accept unsound and dangerous government policies. Here are ten of the most dangerous of these myths and an analysis of what is wrong with them. Myth #1 Deficits are the cause of inflation; deficits have nothing to do with inflation. In recent decades we always have had federal deficits. The invariable response of the party out of power, whichever it may be, is to denounce those deficits as being the cause of our chronic inflation. And the invariable response of whatever party is in power has been to claim that deficits have nothing to do with inflation. Both opposing statements are myths. Deficits mean that the federal government is spending more than it is taking in taxes. Those deficits can be financed in two ways. If they are financed by selling Treasury bonds to the public, then the deficits are not inflationary. No new money is created; people and institutions simply draw down their bank deposits to pay for the bonds, and the Treasury spends that money. Money has simply been transferred from…

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US Fed to Raise Rates with Trade Tensions on Horizon

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The Federal Reserve this week will fire the opening salvo in a series of interest rate hikes this year, hoping to get out in front of an expected pickup in inflation. The first rate hike of the year is overwhelmingly predicted by futures markets, analysts and investors alike to come Wednesday at the conclusion of the Fed’s two-day policy meeting. It also will be the first under newly-installed Fed Chairman Jerome Powell.

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Commentary: The War on Cash is Against Tennesseans and Local Free Markets

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Tennessee Star

  By David Tulis / Noogaradio 1240 AM 92.7 FM The war on cash is a war not against criminals, terrorists, and the underground economy alone. It is a war against local economy and the free market in Tennessee – against private and personal commerce. So take it personally. People in local economy should feel free to circulate cash, because cash lets us distribute once again portraits of some of our finest statesmen. These notables of American history include Benjamin Franklin on the $100 bill and George Washington on the $1 bill. Such is my argument the first Friday of every month, Cash Friday, in which I tell people listening to a radio program to go to their bank or credit union and draw out a $100 bill for handy use in buying and selling. Why would you at the Wal-Mart offer to pay by credit card a $1.75 purchase for a plastic bottle containing a sugary drink? Would it not be better to pass along a very fine engraving of Mr. Washington, one of them, and three quarters (plus the tax in other coin)? It would give you an occasion to say something kind about the one who led the…

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