Say at the end of 2012, Congress can’t strike a budget deal and we reach the dread “fiscal cliff.” Taxes go up, spending gets slashed. Would the U.S. economy fall into recession? The Congressional Budget Office sure thinks so . But Ryan Avent wonders why the Federal Reserve couldn’t just step in. Read full article > >

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Why can’t the Fed just prevent the ‘fiscal cliff’?

Several members of the Federal Reserve’s policymaking committee said they would consider expanding efforts to stimulate the U.S. economy if threats to the recovery worsen, according to minutes of the panel’s April meeting. Read full article > >

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Fed officials open to more efforts to stimulate economy if recovery worsens

In August 2005, Raghuram Rajan, an economist at the University of Chicago’s Booth School of Business, predicted the financial crisis. And he did it at possibly the least friendly of venues: a conference of high-powered economists who had convened in part to honor Federal Reserve Chairman Alan Greenspan. Read full article > >

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Larry Summers vs. the long-termers

NEW YORK — Occupy Wall Street has moved. Its new address: 60 Wall Street. There, inside a soaring public atrium, dreadlocked teens trade shoulder massages near the evening meditation circle. A young man holds up a sign: “You’re a Federal Reserve $lave.” The dinnertime crowd buzzes over free plates of rice and beans while listening to an improvised, profanity-laden operetta about the evils of agro-giant Monsanto. But amid the din, there’s a small group holding a quieter, and far wonkier, conversation. Read full article > >

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Occupy the regulatory system!

The Federal Reserve also said that it would continue existing efforts to stimulate the economy.

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Fed to Stick With Existing Measures

Federal Reserve Chairman Ben S. Bernanke appeared skeptical that the nation’s jobs outlook would improve any time soon, but he stood staunchly by the Fed’s decision to keep interest rates near zero and to avoid any new actions to boost the economic recovery during a press conference Wednesday following the central bank’s two-day policy meeting. Read full article > >

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Fed rejects new action, sees mixed signals on economy

Janet Yellen, the vice chairwoman of the Federal Reserve, said the country’s lackluster recovery could require an emphasis on growth, not inflation, beyond 2014.

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Yellen Says Fed May Need to Extend Support Past 2014

The Federal Reserve said Monday that it will release its findings this week on how the country’s biggest banks would fare under a nightmare economic scenario. The latest round of stress tests examine whether the banks could withstand a crisis in which unemployment hits 13 percent, stocks fall by half, and housing prices drop 21 percent. Banks that are deemed healthy enough would be allowed by regulators to raise dividends for shareholders or buy back shares — both of which can boost their stock prices. Those that don’t pass the test would have to raise their capital levels and face serious questions from shareholders. The results will be out Thursday afternoon. Read full article > >

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Fed to release results of bank stress tests

OF ALL THE financial institutions that got government aid during the financial panic of 2008, none was less morally deserving than AIG. The insurance group imploded due to reckless bets it had made through what was essentially an in-house hedge fund. Nor were many bailouts bigger than the $182 billion combined commitment that the Federal Reserve and the Treasury Department made to AIG during the Bush and Obama administrations. Yet no bailout was more necessary, given the cascading disaster that AIG’s failure could have set off in the U.S. and European financial systems. Read full article > >

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Editorial Board: AIG’s bailout is a quiet success

The U.S. economy started the year with a burst of healthy activity, according to a Federal Reserve survey Wednesday that reported that the country’s factories, stores and even the troubled housing market appeared to be gaining momentum. Read full article > >

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Ben Bernanke strikes cautious tone amid signs economic recovery accelerating

The Republican presidential campaign is breathing new life into the Founding Fathers. In recent months, Republican candidates have invoked these original American statesmen to provide powerful political precedents on issues as diverse as the “Me Generation,” inequality, the legalization of marijuana, the policies of Federal Reserve Chairman Ben S. Bernanke, foreign military intervention, same-sex marriage and religion in public life. And although in real life they often bitterly disagreed with one another, the newly imagined Founding Fathers have reached a surprising degree of harmony in the minds of the GOP presidential candidates on these contemporary matters — many of which were unimaginable in an era of horse-drawn carriages, kerosene lamps and powdered wigs. Read full article > >

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GOP presidential candidates bring Founding Fathers back into political spotlight

The Federal Reserve is actively considering a new round of asset purchases to boost the economy, according to minutes of the central bank’s January meeting released Monday. Concerned that economic headwinds would hold back the fledging recovery, a few Fed officials already favor purchases of additional assets this year, and several others are open to the move if the economy deteriorates, according to the minutes. Read full article > >

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Fed officials open to stimulus action, minutes show

A wave of what former Federal Reserve chairman Alan Greenspan might have called “irrational exuberance” is washing over a great deal of energy analysis these days. One recent headline trumpeted that “Americans Gaining Energy Independence With U.S. as Top Producer.” Another declared “U.S. Nears Milestone: Net Fuel Exporter.” The American Petroleum Institute president Jack Gerard says that with policies more friendly to the oil and gas industry “there would be no need to import from any other parts of the world.” Read full article > >

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Iran’s saber rattling over oil shows that the energy crisis is still with us

Procter & Gamble’s failure to raise the price of Cascade dishwashing soap shows why investors are buying Treasuries at the lowest yields in history, giving the Federal Reserve more scope to boost the economy. Read full article > >

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Sign that bond market backs 3rd quantitative-easing round? Check Huggies’ price.

Federal Reserve Chairman Ben S. Bernanke is testifying before the Senate Budget Committee Tuesday morning about the state of the U.S. economy and the nation’s fiscal health. Bernanke is expected to warn lawmakers against impeding near-term economic growth in the name of cutting a long-term budget deficit. And he is expected to defend the Fed’s policy of keeping interest rates near zero to stimulate the economy — all in line with Bernanke’s testimony last week before the House Budget Committee. Read full article > >

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Bernanke expected to warn lawmakers against hampering growth