Ben Bernanke

July 2008

Say Goodbye to the Reagan Revolution

newser | Wall Street Journal | 2 hours, 33 minutes ago

The Reagan Revolution, which ushered in a quarter century of deregulation, looks as if it's taken a stake in the heart, the Wall Street Journal reports. The Fed is offering tens of billions in emergency loans to failing banks, the SEC wants more power to regulate financial institutions, and the Treasury arranged JPMorgan’s purchase of Bear Stearns and then lobbyied Congress to prop up Fannie and Freddie. Is it dead, or just wounded, the Journal wonders. More »
Fed's Broader Portfolio Raises Some Worries

newser | Washington Post | Jul 17, 08 12:18 PM CDT

Ben Bernanke has been busy recently—too busy, in the minds of some. The chairman has expanded the Federal Reserve's role beyond traditional monetary policymaker to being an all-purpose protector of the financial system. Many of his dramatic moves—the Bear Stearns buyout, backstopping Fannie Mae and Freddie Mac—averted disasters, but could undermine the central bank before long, the Washington Post reports. More »
Consumer Prices Surge Most Since '91

newser | Bloomberg | Jul 16, 08 9:35 AM CDT

Consumer prices rose a staggering 1.1% in June, Bloomberg reports. The figure far surpassed analyst estimates, and brings the year-over-year figure to 5%–the biggest surge since 1991. Core inflation, which excludes food and energy, rose a more-than-expected 0.3%. “Inflation has galloped,” one economist said. “It puts the Fed in a really tricky position. I don't see how they can change rates this year.” More »
Fed to Crack Down on Subprime Loans

newser | New York Times | Jul 8, 08 8:26 AM CDT

The Federal Reserve will issue new rules next week restricting subprime lending and other exotic loans aimed at borrowers with weak credit, Ben Bernanke said today. He said the Fed is also considering extending the overnight low-cost loan program, which helps big banks in need of quick cash, a sign that the Fed believes the financial crisis will continue into 2009. More »

June 2008

Fed Feared 'Contagion' If Bear Failed

newser | Wall Street Journal | Jun 27, 08 1:30 PM CDT

If the Fed hadn't taken the unprecedented step of helping bail out Bear Stearns, a sweeping "contagion" would have doomed the markets, its members say. In newly released minutes from its March 16 meeting, the Fed reasons that the “prominent position of Bear Stearns” left it no choice but to help JP Morgan's purchase, the Wall Street Journal reports. The minutes also reveal that JP Morgan was not the sole suitor—only the “most suitable,” and that fewer than five board members were in on the decision. More »
As Expected, Fed Holds Steady

newser | Associated Press | Jun 25, 08 1:40 PM CDT

The Federal Reserve decided today leave a key interest rate unchanged, bringing an end to a string of consecutive rate cuts aimed at keeping the country out of a deep recession. The federal funds rate will remain at 2%—the first time in 10 months the Fed has failed to reduce interest rates at one of its regular meetings. More »
Fed Likely to Hold Rates— for Now

newser | Reuters | Jun 25, 08 6:17 AM CDT

Despite fears that inflationary forces are revving, the Federal Reserve will probably hold the interbank federal funds rate at 2% today, hoping the bargain basement rate can help kick-start a stalled economy that’s been hamstrung by a tenacious housing slump and a credit crunch hangover, Reuters reports. More »
Paulson Seeks Expanded Fed Powers

newser | Washington Post | Jun 19, 08 6:39 AM CDT

Treasury Secretary Henry Paulson today will urge Congress to broaden the Federal Reserve’s oversight role on Wall Street, giving it the authority to demand data from financial institutions to help prevent incidents like the Bear Stearns collapse. Any major change in regulatory authority would have to be approved by Congress, reports the Washington Post . More »

May 2008

Dow Hikes Prices 20% on Chemicals in Many Products

newser | Wall Street Journal | May 29, 08 2:20 PM CDT

Skyrocketing energy costs prompted Dow Chemical to bump prices up to 20% yesterday on compounds that are the building blocks for thousands of consumer products, fanning inflation fears. Dow, one of the world’s largest chemical companies, ripped Washington for an energy policy it says has raised its energy costs 42% from a year ago, reports the Wall Street Journal. More »
In Turmoil, Bernanke Forged New Persona

newser | New York Times | May 28, 08 10:50 AM CDT

Federal Reserve chief Ben Bernanke’s aggressive actions in March to douse the fire consuming financial markets won him fans on Wall Street and elsewhere, but created a cadre of critics who say the “Bernanke Doctrine” fuels inflation and hurts the dollar, the New York Times reports. “It has been a really head-spinning range of unprecedented and bold actions,” said one expert. More »
Recession Fears Overblown: Economists

newser | Wall Street Journal | May 14, 08 9:50 AM CDT

A growing number of economists are saying, cautiously, that the US might have pulled back from the brink of recession, the Wall Street Journal reports. The experts credit swift action by the Federal Reserve to lower interest rates and save Bear Stearns in March, and even the ongoing distribution of fiscal-stimulus checks, as catalysts for the detour. More »
US Must Stop Foreclosures, Bernanke Warns

newser | Los Angeles Times | May 6, 08 2:35 AM CDT

Federal Reserve Chairman Ben Bernanke yesterday called for government intervention to halt home foreclosures, warning that to do nothing could "destabilize communities, reduce property values of nearby homes, and lower tax revenues." Bernanke said in a speech in New York that a million Americans were already three months behind in mortgage payments at the beginning of this year, threatening dire consequences for the future of the economy, reports the Los Angeles Times . More »

April 2008

Fed Trims Rate to 2%

newser | Wall Street Journal | Apr 30, 08 1:31 PM CDT

As expected, the Federal Reserve cut a key US interest rate today, the Wall Street Journal reports, trimming its overnight rate a quarter-point to 2%. Seven consecutive cuts have the rate down from 5.25% in September as the Fed attempts to keep the economy from stalling under credit woes. "Economic activity remains weak," today's statement says, and markets "remain under considerable stress." More »
Bear Bailout Called 'Worst Mistake in a Generation'

newser | Wall Street Journal | Apr 29, 08 8:18 AM CDT

A former top-ranking Fed official has called the central bank's decision to bail out Bear Stearns its "worst mistake in a generation," the Wall Street Journal reports. The official, former chief of monetary policy, compares the hasty move to errors that helped trigger the Great Depression. He accused officials of ignoring other options, such as demanding more from buyer JP Morgan, seeking other suitors or removing certain assets from Bear's portfolio. More »
Fed Ponders Pause in Rate Cuts—After 1 More

newser | Wall Street Journal | Apr 24, 08 10:05 AM CDT

The Federal Reserve may be ready to cool its torrid rate-cutting after a likely .25% percentage point cut at its meeting next week, the Wall Street Journal reports. Futures markets are betting Chairman Ben Bernanke is unlikely to rest just yet, with little change in the month-to-month economic picture, but will pause after that to assess the cuts' effect and avoid stoking inflation. More »
G-7 Leaders Offer No Fix for Credit Crisis

newser | Wall Street Journal | Apr 14, 08 7:31 AM CDT

Group of Seven finance ministers ended 3 days of meetings in Washington yesterday by endorsing a plan to create greater transparency and oversight in financial markets to avert future crises, but no emergency measures to stem the current one. Despite a downbeat report on the likelihood of worldwide recession, and even hunger riots as the cost of food continues to soar, responses to the credit crisis remain national responsibilities, writes the Wall Street Journal . More »
Fed, Execs Defend Bear Bailout

newser | New York Times | Apr 3, 08 12:10 PM CDT

Bear Stearns was just hours from collapse, and letting it go down would have been disastrous, executives and regulators argued on Capital Hill today while defending the controversial bailout, the New York Times reports. Without the takeover, “we would all be facing a far more dire set of challenges,” said JPMorgan CEO James Dimon, citing the possibility of a mass run on other investment banks. More »
Slow Day Sees Modest Losses

newser | Wall Street Journal | Apr 2, 08 3:48 PM CDT

The markets slid into negative territory after Ben Bernanke's Congressional testimony on the state of the economy today, but trading was generally low-key. "Flat is good," an economist told the Wall Street Journal . "People are getting their nerve back." The Dow ended down 45.44 at 12,608.92, the Nasdaq down 1.35 at 2,361.40, and the S&P 500 down 2.65 at 1,367.53. More »
Bernanke: Adjustment Is Mostly Over

newser | Wall Street Journal | Apr 2, 08 10:24 AM CDT

Ben Bernanke for the first time acknowledged the possibility of a US recession, but he also voiced optimism that “much” of the adjustment period was over, the Wall Street Journal reports. His testimony before Congress seemed to suggest an end to aggressive stimulus measures—noting that rates had already been cut “substantially” and inflation was still a “source of concern.” More »
Congress to Grill Bernanke on Bear Stearns

newser | New York Times | Apr 2, 08 8:40 AM CDT

Federal Reserve Chairman Ben Bernanke steps onto a tightrope today for two days of Congressional testimony focusing on the central bank’s starring role in the Bear Stearns bailout. Bernanke likely will be taken to task for not stepping in earlier, and more forcefully, to avert economic chaos, reports the New York Times . More »