Monetary policy

In a letter to Federal Reserve Chair Jerome Powell, the chair of the Senate Banking Committee warned that the Fed was in danger of going too far in its efforts to tame inflation.

The central bank has recently stepped up its efforts to reduce its balance sheet, but doing that without forcing a liquidity crunch requires careful planning.

Comments from Federal Reserve officials in Jackson Hole last week have markets bracing for further tightening of monetary policy in the near term.

As the Federal Reserve implemented its second 0.75% rate hike in two months, the chair said the system is able to withstand any financial stability risks that rising rates might create. 

As government debt swells, the outer limits of what the U.S. can safely borrow are becoming less and less clear.

The dot plot will be the star of the meeting, but the coronavirus and the elections will be part of the discussion, economists say.

Federal Reserve Chair Jerome Powell announced a new approach to monetary policy Thursday that takes a more relaxed stance on inflation and on its view of how low U.S. unemployment can go.

The panel later this month will vote on the nomination of Judy Shelton, whose views on certain policy issues have met with skepticism from both Democrats and Republicans.

The central bank is only now nearing the launch of the credit facilities after the effort was announced in April. But Chairman Jerome Powell said loans have been available through other means.

Federal Reserve Chairman Jerome Powell said the central bank will maintain its muscular efforts to support the flow of credit in the U.S. economy as Americans hunker down from the coronavirus pandemic.