Fed’s Bullard on the Wires

Says

• He supports central banks ‘swap arrangement’
• He supported Bernanke on dollar swaps
• ‘Prudent’ to ‘bolster’ position via swaps
• So far we are not as bad as 2008-2009
• Liquidity facilities could be reopened if needed
• Bernanke has been ‘very innovative’ in policy
• Europe unlikely to be solved by ‘silver bullet’
• Europe crisis wont ‘go away very quickly’
• Europe crisis about excessive government borrowing
• ‘Notion’ that ECB can run to rescue

Feds Lockhart ‘Skeptical’ More Bond-Buying Will Help Economy

More from Lockhart:

• IMF sees no case for central banks to consider capital flows
• Asset purchases not a ‘potent policy option’
• Sees ‘moderate growth’ in 2012, slow progress on jobs
• US GDP growing at 2.5%-3% pace in 4th quarter
• No option ‘should be taken off the table’
• He’s concerned about market contagion from Europe
• Bond buying may be appropriate in other circumstances
• Votes on monetary policy in 2012
• Enhancing Fed communication ‘worthy priority’
• ‘Skeptical’ more bond-buying will help economy

Fed Chairman Bernanke Speaks From Washington

Says:

• Sees more accomodative financial conditions
• Fed ‘prepared to adjust’ holdings
• Longer-Run estimates inherently uncertain
• Mandate consistent inflation is 2% or ‘bit less’
• Oil down from peaks
• FOMC expects only ‘moderate pace’ of growth
• Jobless rate to gradually decline in coming quarters
• FOMC expects unemployment to fall only gradually
• ‘Pace of progress is likely to be frustratingly slow’
• Will monitor Europe closely
• Europe debt crisis may harm, confidence, growth
• ‘Inflation appears to have  moderated’
• Fed seeks to enhance communication clarity
• FOMC did not make decision on communications

US Chicago Fed National Activity Data Due at 8:30AM

Fed Chairman Bernanke Speaks at Conference In Boston

Says:

• Flexible inflation goal not enough to ensure stability
• Fed is more transparent on outlook, policy
• Crisis to have profound, lasting economic impact
• Applying lessons of crisis to ‘take some time’
• Does not discuss economic outlook
• Fed to increasingly use communication ‘tools’
• Fed seeks to increase clarity about policy goals

Feds Fisher on the Wires

Says:

• Twist to expose fed to losses when rates rise
• Banks earning power will come under added pressure
• Fed policy ‘has yet to show evidence of working
• Operation twist will increase incentives to save
• Further monetary accommodation ‘pushing on string’
• FOMC policies may work against job creation
• Benefits of operation twist don’t outweigh costs

Fed’s Bernanke Gives Statement in Minneapolis

Says:

• Policy makers shouldn’t disregard economy’s fragility
• ‘Little indication’ higher inflation ingrained
• Fed will do ‘all that it can’ on growth, jobs, prices
• Substantial tightening could hurt growth, hiring
• U.S. banks, financial system are stronger
• FOMC to consider tools at meeting this month
• ‘Greater downside risks’ to outlook
• Inflation ‘expected to moderate’ in coming qs
• Growth ‘likely to pick  up’ in second half
• U.S. finances could ‘spiral out of control’
• Fed has a ‘range of tools’ for more stimulus
• Substantial fiscal tightening could hurt recovery

Fed Beige Book Summary

Says:

• Economy ‘continued to expand at a modest pace’
• Resedential real estate was weak overall
• ‘Demand for services was generally positive’
• Pace of manufacturing ‘slowed in many districts’
• Some districts saw ‘mixed or weakening activity’
• Consumer spending rose slightly in most districts
• Treasury official sees need for U.S fiscal consolidation
• Most manufacturing contacts ‘less optimistic’ than before
• Five districts reported ‘modest or slight’ growth
• Labor markets were generally steady
• Economic growth slowed in Richmond district
• Loan demand was ‘stable to slightly weaker’

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