Fed Divided on When to Sell Assets
Most of the U.S. Federal Reserve Board wants to see the central bank’s balance sheet shrink faster than it would by simply letting its $1.1 trillion in mortgage-backed securities holdings mature. But the Fed is divided on just when it should start selling off those holdings, acquired during the financial crisis through an emergency program aimed at keeping mortgage interest rates low.
Fed Trims Program for Loans to Banks
The Federal Reserve is cutting the sum it will loan to banks through each of its two Term Auction Facility offerings in August, another sign it sees credit markets as healing.
Federal Reserve Raises Interest Payments on Reserves
Paying interest on reserves gives the central bank additional leeway in supporting credit markets by giving it greater flexibility to expand its balance sheet, a need buoyed by the Fed’s recent announcement of several liquidity arrangements aimed at helping stabilize the financial sector.
Fed Balance Sheet Shrinks as Borrowers Retreat
The Federal Reserve’s asset holdings shrunk for the sixth consecutive week as borrowing from several of its facilities declined. Some economists take the declines as a sign that the Fed’s programs are working and that private-sector borrowers are depending less on the central bank for financing.
Regional Fed President: Fed May Have to Move on Interest Rates
Keeping inflation well-contained may require the U.S. Federal Reserve to act, including on interest rates, before a vigorous economic recovery has established itself.
Republican Lawmakers Urge End To Fed’s Dual Mandate
Republican lawmakers on Tuesday called for a narrowing of the Federal Reserve’s focus to price stability, the latest attempt by Republicans to politically tamper with the central bank.