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BUSINESS
June 20, 2012 | By Jim Puzzanghera
WASHINGTON -- The Federal Reserve on Wednesday sharply lowered its economic growth forecasts through 2014 and projected that unemployment could remain above 8% through next year. The central bank released the new forecasts ahead of Chairman Ben S. Bernanke's quarterly news conference. Earlier, the Federal Open Market Committee voted to extend a program designed to lower long-term interest rates as it tries to respond to slowing growth in the U.S. and around world. The program, called Operation Twist, was set to end on June 30 but now will continue through the end of the year as the Fed warned of a slowdown in the growth of jobs and household spending.
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BUSINESS
April 22, 2014 | By Jim Puzzanghera, This post has been corrected. See the note below for details.
The Federal Reserve's low interest rate policies, designed to stimulate the economy, have cost savers about $758 billion since the end of the Great Recession, according to a study released Tuesday. Inflation and low returns on deposits have led bank customers to lose more than $100 billion in purchasing power in each of the last five years, said MoneyRates.com, which provides consumers with information about bank rates, investing and personal finance. The Fed's benchmark short-term rate has been near zero since late 2008 as central bank policymakers tried to battle the financial crisis and Great Recession.
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BUSINESS
May 1, 2013 | By Jim Puzzanghera
WASHINGTON -- Federal Reserve policymakers said Wednesday they would continue their stimulus efforts and hold steady on rock-bottom interest rates, but announced no new actions as the economy appeared headed for another spring slowdown. After a two-day policy meeting, the Federal Open Market Committee voted 11-1 to continue its so-called quantitative easing program of purchasing $85 billion of Treasury and mortgage-backed securities each month. However, for the first time since starting the program last fall, the Fed's said in its policy statement that the central bank was prepared to "increase or reduce" the pace of its purchases.
BUSINESS
April 15, 2014 | By Jim Puzzanghera
WASHINGTON -- The Federal Reserve is considering tougher rules for big banks to keep credit flowing in case of another financial crisis, Fed Chairwoman Janet L. Yellen said Tuesday. Although officials from the Fed and regulatory agencies approved more stringent requirements for the eight largest banks last week, Yellen said additional measures might be needed to keep short-term credit markets from freezing up during stressful financial conditions. "In 2007 and 2008, short-term creditors ran from firms such as Northern Rock, Bear Stearns and Lehman Bros., and from money market mutual funds and asset-backed commercial paper programs," Yellen said in a video speech to the Federal Reserve Bank of Atlanta's financial markets conference.
NATIONAL
October 17, 2012 | By Tina Susman
NEW YORK -- Federal agents Wednesday arrested a 21-year-old Bangladeshi man in Manhattan who authorities said planned to detonate what he thought was a massive bomb outside the New York Federal Reserve Bank building . The man, who was identified as Quazi Mohammad Reswanul Ahsan Nafis, claimed to have ties to Al Qaeda and was in New York trying to recruit people, according to a complaint. According to a statement released by the FBI, Nafis entered the United States on a student visa in January 2012 but his real purpose was to wage "jihad," or holy war. Unbeknownst to him, one of the people he tried to recruit was an FBI source, who met with Nafis several times through the summer and into the fall, the statement said.
BUSINESS
June 7, 2013 | By Jim Puzzanghera
WASHINGTON -- Former Federal Reserve Chairman Alan Greenspan said the central bank should start tapering its stimulus program and begin reducing its dramatically swelled balance sheet -- whether the economy is ready for it or not. "My view is the sooner we come to grips with this excessive level of assets on the balance sheet of the Federal Reserve, which everyone agrees is excessive, the better," Greenspan told CNBC on Friday. The Fed needed to scale back its monthly bond purchases slowly because it was unclear how financial markets would react.
BUSINESS
April 10, 2013 | By Don Lee
WASHINGTON -- Most Federal Reserve policymakers favor maintaining the current pace of bond-buying until at least the middle of this year, but the weak March jobs report muddles the picture of when the Fed might pull back and eventually halt its stimulus program. Minutes of the Fed's last policy meeting three weeks ago, released Wednesday, show that the 19 participants were divided over when to wind down the central bank's program of purchasing monthly $85 billion of Treasury and mortgage-backed securities.
BUSINESS
March 13, 2014 | By Jim Puzzanghera
WASHINGTON -- Stanley Fischer, the former Bank of Israel president nominated for the Federal Reserve's No. 2 job, defended his work on Wall Street and told senators at his confirmation hearing Thursday that he understood the effect of economic problems on average Americans. Pressed more by Democrats than Republicans on his background, Fischer said his tenure as vice chairman of Citigroup Inc. from 2002 to 2005 was key to his ability to oversee financial institutions as a central banker.
BUSINESS
September 18, 2013 | By Jim Puzzanghera
WASHINGTON -- Is it taper time for the Federal Reserve? That's the key question as the financial and economic worlds await the end of the central bank's policymaking meeting Wednesday and Fed Chairman Ben S. Bernanke's quarterly news conference. The central bank's Federal Open Market Committee will release its policy statement at 2 p.m. EDT. Thirty minutes later, Bernanke will sit behind a custom-made desk to detail the committee's actions and reporters' answer questions. QUIZ: How well do you understand the Fed stimulus?
BUSINESS
September 18, 2013 | By Jim Puzzanghera
WASHINGTON -- Federal Reserve policymakers unexpectedly voted Wednesday not to alter one of the central bank's key economic stimulus programs. The move defied market expectations that the Fed would begin tapering its monthly purchases of $85 billion in bonds this month. The Dow Jones industrial average shot up about 80 points on the news. Live chat: Join us at 2 p.m. The decision to continue the year-old program at its same pace for at least another month showed concern by Fed officials that the economy is too weak to handle even a small reduction in stimulus.
BUSINESS
April 9, 2014 | By Don Lee
WASHINGTON - An account of the Federal Reserve's last meeting suggests that policymakers aren't as eager to take away the punch bowl as the market thought. The minutes of the March 18-19 meeting state that Fed officials worried that their individual projections for when the central bank would start raising interest rates "could be misconstrued" as indicating a shift by the Fed committee to tighter monetary policy. The average projections released after the March meeting showed a slight move forward in the anticipated timing of a Fed rate increase, and Fed Chairwoman Janet L. Yellen herself gave the impression in a news conference that day that a rate hike could be made by mid-2015, earlier than what the market had been expecting.
BUSINESS
April 3, 2014 | By Jim Puzzanghera
WASHINGTON -- Federal Reserve Governor Jeremy C. Stein plans to step down next month, creating another vacancy on the central bank's already short-handed board. Stein, 53, a Harvard economist and former Obama administration advisor, has served on the Fed board since May 2012. His resignation will be effective May 28, and he plans to return to teaching at the university, the Fed said Thursday. Stein was filling the rest of a term that doesn't expire until 2018. PHOTOS: Federal Reserve chairs through the years In his resignation letter to President Obama, Stein said serving on the Fed board was a "great privilege.
BUSINESS
March 26, 2014 | By Jim Puzzanghera and E. Scott Reckard
WASHINGTON - Federal regulators rejected plans by Citigroup Inc. and four other large U.S. banks for dividend payments and stock buybacks after the latest round of stress tests. The results raised concerns about weaknesses in the risk-planning processes of Citi and three of the banks, the Federal Reserve said Wednesday. It was the second time in three years that Citi failed a federal stress test. Citi's chief executive, Michael Corbat, said he was "deeply disappointed" by the Fed's findings, asserting that the nation's third-largest bank by assets was "one of the best-capitalized financial institutions in the world.
BUSINESS
March 26, 2014 | By Jim Puzzanghera
WASHINGTON -- The Federal Reserve said Wednesday it rejected plans by Citigroup Inc. and four other large U.S. banks for dividend payments and stock buybacks after annual stress tests. Those tests raised questions about weaknesses in the risk-planning processes of Citi and three other banks. And the Fed rejected the capital distribution plan of one firm, Zions Bancorporation of Salt Lake City, because of concerns about its financial health during a extreme financial downturn. Overall, 25 of the 30 biggest banks received regulatory approval to pay back money to shareholders after the tests indicated the firms could withstand a severe economic shock even after shedding that capital.
BUSINESS
March 21, 2014 | By E. Scott Reckard
A Federal Reserve rule allowing banks to charge retailers 21 cents to process debit-card transactions has been upheld by a federal appeals panel, a blow to big merchants such as Wal-Mart Stores Inc. and Target Corp. A lower court judge invalidated the fee cap in July, ruling that the Fed's formula included costs that weren't allowed under the Dodd-Frank regulatory reforms that Congress passed in the aftermath of the financial crisis. But in a ruling Friday for a three-judge panel, Judge David Tatel of the U.S. Court of Appeals in Washington said the central bank's rules “generally rest on reasonable constructions of the statute.” GAS: See latest prices in Southland, nation Merchants, who had argued that they were entitled to a lower cap, expressed disappointment, while financial firms said they were relieved.
BUSINESS
March 21, 2014 | By E. Scott Reckard
Zions Bancorp, which failed a Federal Reserve test simulating a severe recession, says it has shed some high-risk holdings and will submit a beefed-up capital plan for approval. Zions said the Fed determined that its holdings of loans and securities were riskier than it had calculated, that losses on commercial mortgages would be problematic, and that its revenue would fall sharply under economic stress.  "The resubmission will contain additional actions that will further reduce risk and/or increase its common equity capital sufficient to cause Zions' capital ratios to meet or exceed the minimum capital ratios," Zions said in a statement late Thursday.
BUSINESS
March 19, 2014 | By Jim Puzzanghera
WASHINGTON -- Federal Reserve policymakers voted Wednesday to continue reducing their bond-buying stimulus program and said they no longer would consider raising its near-zero interest rate once the unemployment rate fell below 6.5%. The Federal Open Market Committee voted 8-1 to cut its monthly bond purchases to $55 billion, staying on pace to end the controversial program by the end of the year. The economy grew slower this winter, but that was partly because of bad weather. Still, Fed officials downgraded their growth projections.
BUSINESS
March 19, 2014 | By Jim Puzzanghera
WASHINGTON -- Janet L. Yellen, who broke the Federal Reserve's glass ceiling, marks two more milestones Wednesday, wrapping up her initial policymaking meeting as chairwoman then facing reporters' questions for the first time since taking office last month. The Fed chair's quarterly news conferences have drawn great attention since her predecessor, Ben S. Bernanke, began holding them in 2011 to improve public understanding of the central bank's actions. Now Yellen takes over the tradition, which adds an additional challenge to the job as financial markets try to interpret every answer for signs of the Fed's direction.
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