AUTOREFRESH 
Obama’s Fed team taking shape
The trial balloons are aloft. If they don’t get shot down, these three are likely to fill the vacancies on the Federal Reserve Board.
Fed’s Dudley: Can’t wait to cut deficits
Once investors lose confidence in government debt it can erode quickly, the NY Fed president says.
Sounds like someone isn’t a member of the JM Keynes fan club…
Fed’s Evan’s: Labor market weaker than unemployment rate suggests
- Weak labor markets will keep the Fed sidelined for some time
- Headwinds from tight credit and spending caution will restrain recovery but abate this year
- Long way to go before labor makrets back to normal
“Lower for longer” is here to stay, the Chicago Fed president suggests…
He is speaking at the NABE nerd-fest outside Washington…
Fed adds to toll kit
The Fed has announced it will expand the counterparties with which it can conduct reverse repos.
What are reverse repos? They are a monetary policy tool used to drain liquidity from the banking system.
Just one more of the minor policy shifts undertaken by the Fed to implement its exit strategy when the time comes. The time has not come yet, however.
EUR/USD is easing after the news, now at 1.3665.
Romer says she’s not a candidate for the Fed
White House economist Christina Romer says she most certainly won’t be a candidate for one of the openings on the Federal Reserve Board. This confirms she is almost certain to be nominated…
Bullard: Fed must project to world that inflation will be kept low and stable
- He has no intrinsic problem with China being a large buyer of US debt.
- Super easy policy is appropriate as economy recovers
- Asset sales are very much at issue within the Fed, he allows.
Bullard: Fed’s dual mandate inconsistent with one another
St Louis Fed president Bullard says the Fed’s dual mandate (full employment and price stability) are inconsistent with one another. Sounds like he prefers the ECB model of price stability uber alles.
Dealing with bubbles will be the biggest challenge for the Fed going forward Bullard says.
Fed’s Bullard: Expanded monetary base has created medium-term inflation risk
St Louis Fed president Bullard says that quantitative ease should be adjusted the same way the Fed adjusts traditional monetary policy.
The expansion of the monetary base associated with QE is likely to be persistent and add to medium-term inflation risks, Bullard says.
EUR/USD is extending its slide with the hawkish Fed comments not hurting a bit…
1.3584 is next support. We trade now at 1.3599.
Beige Book: Modest strength; growth in 9 of 12 districts
- Severe snowstorms held back activity in several districts
- Pace of layoffs slowed; hiring plans soft
- Manufacturing and consumer spending improved
- Residential real estate improved but commercial real estate soft
- Loan demand weak
Fed’s Lockhart: Watching Greece with an eye toward contagion
Atlanta Fed president Lockhart says they are watching the Greek situation with concern, particularly the risk of contagion.
For all you ‘Greece is only 3% of EU GDP’ fans, that’s why Greece matters. If the market knocks Greece for a loop, it will turn its sights on the next most vulnerable European sovereign and so on…
On the Us economy, Lockhart says he’s uncomfortable with extraordinarily low rates for a sustained period of time and is eager to get rates to more normal levels.
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