The records show Fed officials struggling to understand the magnitude of the financial crisis that was underway, and the potential fallout for the economy.
Federal Reserve Chairman Ben S. Bernanke said a willingness to resist political encroachment has been a key strength of the Fed during its first century as the U.S. central bank.
The Federal Reserve can avoid unprecedented losses by never selling mortgage-backed securities from its record $3.84 trillion balance sheet, according to updated estimates by Fed economists in Washington.
The U.S. economy maintained a “modest to moderate pace” of growth in recent weeks, bolstered by industries from housing to manufacturing, the Federal Reserve said today.
Federal Reserve Bank of New York President William C. Dudley said the central bank may prolong its asset-purchase program if the economy’s performance fails to meet the Fed’s forecasts.
Federal Reserve Bank of Philadelphia President Charles Plosser said unemployment will probably fall to 7% at the end of 2013 and he would favor reducing the Fed’s $85 billion monthly pace of bond purchases next month.
Federal Reserve Bank of New York President William C. Dudley said a slowdown in the pace of employment growth in March highlights the need to maintain the pace of bond purchases.
During the past three years, the Fed planned to cut accommodation early in the year only to boost it after economic growth lagged behind its forecasts. This time, Federal Reserve policy makers are prepared for the summertime slump.
Several Federal Reserve policy makers said the central bank should be ready to vary the pace of their $85 billion in monthly bond purchases amid a debate over the risks and benefits of further quantitative easing.
The dwindling ranks of the long-term unemployed, while testament to the improvement in the labor market, also shows the diminishing returns from extended unemployment insurance payments.
