The Federal Reserve, Explained

The Federal Reserve is central to the U.S. economy today, and it’s controlled by just 12 people. Its monetary policies can lower inflation or even spark a recession. 

The central bank says it’s dedicated to achieving its goals set by Congress to maximize employment and maintain price stability, but some of its decisions like raising interest rates are not always popular with Americans. 

WSJ explains how the Fed became the power it is today and why it plays such a major role in the country.

Fed launches instant payment service FedNow

Yahoo Finance Fed Reporter Jennifer Schonberger reports on the new US instant payment service called FedNow.

Is a Digital Dollar Coming? Some Financial Experts Warn It Could be Instrument of Government Control

More and more central banks around the world are in the early stages of creating digital currencies. 

Federal Reserve Chairman Jerome Powell told the House Financial Services Committee in March that the Fed had already begun testing a digital dollar. 

Powell told the House Financial Services Committee, "We're not at the stage of making any real decisions. What we're doing is experimenting in kind of early-stage experimentation. How would this work? Does it work? What's the best technology? What's the most efficient really at an early stage on? But we're making progress on sort of technological issues." 

Just like paper dollars, a Central Bank Digital Currency of CBDC would be issued by the Federal Reserve. 

Those pushing for it say it would have several advantages over physical money. They say it could be used to fight inflation because the Fed would have more direct control over the money supply. It could speed up transaction payments and help fight money laundering.

But, what about privacy issues?

Is The Banking Crisis Finally Over?

A look at the takeover of First Republic Bank by the FDIC and its subsequent sale to JP Morgan. 

We explore the impact of this crisis on other regional banks such as PacWest and Western Alliance, and discuss whether or not the banking crisis is finally over, as JP Morgan CEO Jamie Dimon claims.

How It Happened: The 2008 Financial Crisis - Warren Buffett

Warren E. Buffett is an American investor, philanthropist, business tycoon, and the chairman & CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world and has a net worth of over 100 billion dollars. Buffett was born in Omaha, Nebraska. He developed an interest in business and investing in his youth and made truly incredible stock market returns over his career.

Why Bond Yields Are a Key Economic Barometer

U.S. government bond yields aren’t just a barometer of the economy, they also influence the cost of borrowing, from mortgages to student loans. WSJ explains how they work and why they’re so crucial to the economy.

The Fed's CBDC report

The Federal Reserve isn’t in a rush to join the crypto-bandwagon. That's the takeaway from a draft paper the Fed released Thursday laying out the pros and cons of a Central Bank Digital Currency (CBDC).

The 40-page report makes no policy recommendations and is designed to solicit comments from the public.

"We look forward to engaging with the public, elected representatives, and a broad range of stakeholders as we examine the positives and negatives of a central bank digital currency in the United States," Federal Reserve Chair Jerome Powell said in a press release last Wednesday.

Read the full article HERE.

The Fed Plans to Taper. Here’s What That Means

The Federal Reserve says it will accelerate the wind-down of its bond-buying program, the biggest step the central bank has taken in reversing its pandemic-era stimulus. Here’s how tapering works, and why it sends markets on edge.

Ray Dalio on Evergrande, China, Bitcoin and the Fed

Ray Dalio, founder and co-chief investment officer at Bridgewater Associates, talks about the China Evergrande Group’s debt crisis, doing business in China, the value of Bitcoin and when the Federal Reserve might start to taper its monthly bond purchases. He spoke to Tom Keene on "Bloomberg Surveillance" from the Greenwich Economic Forum in Connecticut.

The Fed Pushing For CBDC, "Can't Wrap Their Head Around Not Having It"

 From the Uneducated Economist, an interesting view on the Fed's thinking about a CBDC plus a great take on assets, investments, banking, money and the economy generally.

 

The Dhaka caper

From The Economist -

“Online thieves unseat the governor of Bangladesh’s central bank.

It was audacious as any heist and yet unlikely material for a Hollywood blockbuster. Hackers masquerading as officials from Bangladesh’s central bank asked the New York branch of the Federal Reserve to transfer nearly $1 billion to private bank accounts in Sri Lanka and the Philippines. By the time authorities cottoned on, $101m had been nicked. On March 15th Atiur Rahman, the governor of Bangladesh’s central bank, took the blame and resigned.”

Read more>>

FEDCOIN a possible US government cryptocurrency

Senior Federal Reserve Bank of St Louis researcher David Andolfatto has put forward the idea of a US government-backed 'Fedcoin' that uses a bitcoin-style protocol but the US dollar as the monetary object. This would combine the best of a cryptocurrency and cash.

Read his blogpost “Fedcoin: On the Desirability of a Government Cryptocurrency” or watch his presentation at the “P2P Financial Systems 2015” at the Bundesbank Frankfurt am Main Germany on 29th January 2015 (below).

The Fed Backs Away from Bitcoin for Real-Time Payments

From Payments Source –

“The Federal Reserve appears to have looked at Bitcoin as a potential set of rails for real-time payments in the banking system but shelved the concept for now.

The agency’s white paper on improving the payments system, released Monday, coins a new euphemism for Internet cryptocurrencies (of which Bitcoin is by far the best known): "Digital Value Transfer Vehicles." These are defined as "decentralized digital stores of value that can be exchanged."

One such transfer vehicle, which goes unnamed in the paper, "was not considered a sufficiently mature technology at this time, but was identified for further exploration and monitoring given significant interest in the marketplace," the Fed said. Of the hundreds of cryptocurrencies that have sprouted up in the last few years, we're pretty sure the Fed is not referring to HoboNickels or PhilosopherStone.”

Read more>> 

Fostering Payments Innovations

From Federal Reserve Bank of Chicago -

The Federal Reserve Bank of Chicago hosted its 14th annual Payments Symposium on September 25–26, 2014. Industry leaders met to discuss ways to make the U.S. payment system faster, more convenient, and more secure as a whole. Participants evaluated emerging domestic payments trends and examined other countries’ recent experiences with payment system upgrades to help develop a U.S. framework for future innovations.

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