By Bob Stokes On December 13 the Federal Reserve left interest rates unchanged. The Fed's statement said "the economy has been expanding moderately." On December 15, economic reports included: weekly initial jobless claims hitting a three-and-a-half year low; the Philadelphia Fed's Business Outlook for December surprised to the upside; and the National Retail Federation raised its holiday sales forecast. Even so, a not-so-positive thing also happened on the way to the "economic recovery": "Americans got much poorer last quarter, as their collective household net worth suffered the biggest decline in three years." New York Times, December 8 Other things also happened on the way to … [Read more...]
Understanding the Federal Reserve Bank
What's a greater threat to the U.S. economy -- inflation or deflation? To decide that... it helps to understand what role the U.S. Federal Reserve plays. Despite so much focus on the policies of the Fed, its operations remain somewhat of a mystery to most investors -- in no smaller measure, due to their complexity. Here's an excerpt of a 35-page report that explains the Fed, its goals and, very importantly, its limitations in layman's terms. … [Read more...]
