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    Federal Reserve

    The minutes from last month's Federal Open Market Committee (FOMC) meeting provided zero clarity on the U.S. Federal Reserve's plans to raise interest rates in 2015. The markets need to know when the Federal Reserve might raise interest rates, or at least what economic conditions it will use to make the decision.

    But all we get from the Federal Reserve is waffling. And the economic targets that would trigger action get increasingly vague. Meanwhile, the Fed members make things worse by publicly voicing their uncertainty.

    Just look at some of these quotes...

federal open market committee

Here's What Rising Rates Really Do to Your Shares

rising rates

There is a lot of lip service being paid to the upcoming stock market crash that we're supposed to expect once the Federal Reserve starts raising rates.

Every time we get close to a regularly scheduled Federal Reserve statement, financial pundits pontificate about the nuances of what the Fed Chair might say, not say, or imply.

It's like clockwork.

But one theme remains constant: any tightening of the Fed's easy monetary policies will spell impending doom for the easy-money-addicted stock market.

The only problem, though, is that historical facts just don't support the fear. In fact, there are opportunities for investment out there no matter what rates do... Full Story

The Real Reason the Federal Reserve Is Afraid to Raise Interest Rates

Federal Reserve

When the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve meets next week (Sept. 16-17) to consider when it should raise interest rates, it will have a huge disincentive to do so.

And we're not talking about what you'll hear in the mainstream media about whether the unemployment rate is finally low enough, or whether U.S. economic growth is finally strong enough to warrant tightening monetary policy.

No, what the Federal Reserve fears most is a problem of its own creation...

Stock Market News Today Headlined by FOMC Minutes and Big Box Retailers

Stock market news today

Stock market news, Aug. 20, 2014: U.S. stocks roared again Tuesday, buoyed by strong earnings reports and a slew of positive economic data.

The positive data and strong earnings reports overshadowed any concerns about ongoing geopolitical tensions in Ukraine, Israel/Gaza, and Iraq. Yesterday, the Kremlin announced that Russian President Vladimir Putin will meet with Ukrainian President Petro Poroshenko next week to discuss ways to resolve the problems plaguing Eastern Europe.

Here's what you must know about the stock market today to start profiting...

Federal Reserve FOMC Meeting Schedule 2013-2014

As a service to Money Morning readers, we are providing the Federal Reserve FOMC meeting schedule.

The U.S. Federal Reserve's Federal Open Market Committee (FOMC) is a 12-member board within the Federal Reserve system that meets eight times a year to set policy.

In addition to the regularly scheduled meetings, the FOMC can call other meetings as needed. The minutes of a regularly scheduled FOMC meeting are released three weeks after the date of the policy decision.

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What's So "Open" About the Federal Open Market Committee?

Don't you just love how some things are named?

Like the Federal Reserve System, for instance. It's a central bank that was conceived in the private study of a private hunting lodge on a private island by a bunch of private bankers who didn't want to use the word "bank" in its name to fool taxpayers who thought it was a "system" to safeguard the public... from the very bankers who conceived it.

I don't know about you, but the feeling of safety I have is just overwhelming... NOT.

Then there's the Federal Open Market Committee (FOMC). That's a committee of top plotters that meets in private to discuss what's going on in "free" markets so they can figure out how to manipulate them.

The Open Market Committee, or the Old Boys Club (they have a woman on the committee, but she's just a token "dove" who plays "Follow the Beard"), meets today and Wednesday to check on how their manipulations have stopped unruly free markets from sinking the banks that secretly run the Fed (you know it's not a secret, but there are a whole lot of taxpayers who don't).

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FOMC Meeting Message: Don't Blame Us for Sluggish Economy

Fed logo

The Federal Open Market Committee (FOMC) meeting concluded today (Wednesday) with one clear message to Washington: Thanks for the lousy economy.

Central bank members cited only "moderate" expansion in economic activity and a slow improvement in the stubbornly high unemployment level.

Acknowledging the economy is moving at an unhurried pace, the FOMC members pointed an accusing finger at Capitol Hill.

"Fiscal policy is restraining economic growth," the statement read. That remark was in direct reference to a deadlocked Congress, sequestration and its far-reaching impact.

A spate of fresh economic reports back that sentiment:

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FOMC Meeting: What the Fed Policy Changes Mean For You

The Federal Open Market Committee (FOMC) meeting ended yesterday (Wednesday) with two important changes to Fed monetary policy.

First, the central bank said it would increase the amount of quantitative easing by replacing Operation Twist, which ends Dec. 31, with outright purchases of long-dated Treasury bonds.

Under Operation Twist, every month the Fed sold $45 billion in short-term Treasury bonds and notes and bought $45 billion of long-term Treasury bonds in an effort to keep long-term interest rates low.

Because the Fed funded its purchase of long-term bonds with the sale of short-term bonds and notes, no new money was created.

However, outright purchases of long-term bonds will create new money-$45 billion every month-and, by concentrating its buying at the long end of the yield curve, the Fed should be able to keep long-term interest rates low.

The Fed also said it will continue to purchase $40 billion of mortgage-backed securities each month, creating a total of $85 billion in new money from these operations monthly.

That means QE4 is here.

Starting in January, the Fed will be more than doubling the amount of money it is pumping into the economy. Happy New Year!

Second, the Fed set unemployment and inflation "thresholds," instead of setting a date for when the central bank expects to be able to raise interest rates. What this means is that the Fed will not raise interest rates unless unemployment is 6.5% or less or inflation is more than 2.5%.

By setting thresholds where monetary policy might change, the Fed is attempting to improve its communications with the public.

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Today's FOMC Meeting Ends with Major Change

After today's Federal Open Market Committee (FOMC) meeting, the Fed announced it would expand the third round of its bond buying with fresh stimulus, replacing the soon to expire Operation Twist, set to end Dec. 31.

And in an additional unprecedented move from the central bank, interest rate decisions will now be tied to the unemployment rate and inflation.

About a half hour into the release, the Dow Jones Industrial Average staged a near 65-point rally - but then lost that gain and ended down nearly 3 points at 13,245.45.

Here's a breakdown of the FOMC meeting outcome.

Today's FOMC Meeting: QE4

As expected, the FOMC meeting ended with a replacement for Operation Twist, the expiring program introduced in 2011 of swapping short-term Treasuries for longer dated ones. The goal of Operation Twist was to lower long-term interest rates to stimulate the U.S. economy.

The new asset purchase program is an extended arm of the Fed's familiar quantitative easing programs, and has thus been dubbed QE4.

Now with QE3 and QE4 together, the Fed will purchase a whopping $85 billion a month of Treasury securities, stacking the Fed's portfolio with government-backed investments for an extended period.

The buying spree will remain intact until the unemployment rate falls below 6.5% and inflation projections remain no more than half a percentage point above 2% for two years out.

The Fed also left interest rates at rock-bottom historic lows near zero, as was also expected.

While these moves were widely expected, what wasn't expected was the Fed's forward-looking guidance.

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This Week's FOMC Meeting: Why to Expect More Stimulus

Investors should expect welcome news from the U.S. Federal Reserve Wednesday at the end of this week's two-day FOMC meeting.

As central bankers gathered Tuesday for the last policy meeting of the year, expectations were high that Fed Chief Ben Bernanke and his cohorts will announce a large scale asset purchase plan to replace the soon-to-end Operation Twist, introduced in September 2011.

The Fed hopes additional stimulus will finally boost growth and the employment level. With the current unemployment level at an elevated 7.7% -- a number that economists say will be revised higher in the coming weeks - the weak labor market remains a grave concern.

At recent meetings, the Fed indicated that it will continue QE3, the policy of buying $45 billion in mortgage-backed securities each month until it sees a significant and sustained improvement in the employment scene - which is unlikely to come anytime soon.

Together with Operation Twist, the two programs added some $85 billion in long-term bonds to the Fed's balance sheet each month.

The aim, the Fed said in a statement, "should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative."

The central bank has also stressed it would employ its other policy tools "if the labor market does not improve substantially."

While the Fed did not elaborate on what those tools are, it maintains it still has plenty of ammo left and stands ready to pull the trigger when and if necessary.

It looks like now is the time.

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