Federal Reserve

Can The US Federal Reserve Really Control Inflation?

September 1, 2024 Radhika Desai and Michael Hudson, Geopolitical Economy. Resistance Report Federal Reserve, Inflation, Interest Rates, Labor

Another August, another speech by the Federal Reserve Chairman at the Jackson Hole Conference, where top central bankers and economists go to hobnob. So what’s new? Well, plenty. The last two speeches by Chairman Jerome Powell in 2022 and 2023 had markets nose-diving. In 2022, appearing contrite about having considered inflation transitory, Powell signaled that the unrelenting rate rises and promised to do all it takes to slay the dragon of inflation. Markets, high as they have been on the easy money of recent decades, went into severe and violent withdrawal. The following year, having brought rates up from a low of 0.25 percent to 5.5 percent, Powell now promised to keep them higher for longer, as he put it, because that is what he considered necessary to quell the still-persisting inflation.

Debt Is Political: Why Wealth Flows From Poor To Rich

August 5, 2024 Radhika Desai and Michael Hudson, Geopolitical Economy. Resistance Report Capitalism, Debt, Federal Reserve, wealth inequality

You may think that today, given the events of recent weeks, we might be talking about the wars that seem set to spiral out of control, particularly with Israel appearing so determined to escalate its hostilities with Hezbollah that it is willing to make accusations on entirely and visibly flimsy grounds. You might think that we will talk about how it’s not at all clear who’s in control, particularly in that country that so often fancies itself as the world’s policeman or woman, as the case may be. And indeed, we certainly intend to cover these topics in the future. However, today we will focus on a very closely related topic, and that is debt.

The Fed’s ‘Chicken Run’: Sticking With High Rates Will Crash The Economy

June 27, 2024 Thomas Ferguson and Servaas Storm, Scheer Post. Educate! Federal Reserve, Finance and the Economy, Inflation, Recession

On June 13th, financial markets discovered they had overestimated the likelihood that the Federal Reserve would soon be cutting interest rates. Federal Reserve Chair Jerome Powell’s remarks at his press conference and the Federal Open Market Committee’s freshly updated quarterly “Summary of Economic Projections” pointed forcibly to the conclusion that the Fed would likely cut rates only once before the end of 2024. In the midst of their own historic surge, US financial markets could mostly afford just to sigh. Reactions elsewhere were less sanguine: Some international commentators worried that higher for longer US rates would make repaying foreign dollar loans harder and accelerate a movement of capital out of the developing world.

The Fed Is Behind The Credit Card Merger

March 3, 2024 Matt Stoller, The Lever. Educate! Big Banks, Credit Cards, Federal Reserve, Finance and the Economy

It’s an obvious point, but credit cards in America generate a lot of cash for banks. In 2022, I wrote up how the business works, with the observation that the industry generates close to a quarter trillion dollars a year in revenue. This revenue comes from fees for connecting merchants and banks, as well as fees charged to consumers for access to credit. Every credit card network is also a data sieve, connected to advertising data brokers, anti-fraud features, and analytics firms. In addition, being able to reject someone from the payments system is a core sovereign power, and the stated reason the right is so afraid of a central bank digital currency.

Most Important Stories Of 2023: Gaza, Ukraine, China, BRICS, Dedollarization, Bank Crises, Inflation

December 31, 2023 Ben Norton, Geopolitical Economy. Resistance Report Argentina, Brazil, BRICS, China, crypto, De-dollarization, Debt, dollar, Donald Trump, Egypt, Ethiopia, Fed, Federal Reserve, Gaza, Imran Khan, India, interest, Iran, Israel, Janet Yellen, Javier Milei, Jerome Powell, Joe Biden, Lula da Silva, Narendra Modi, New Years Eve, Pakistan, Pedro Castillo, Peru, Russia, Sam Bankman-Fried, Saudi Arabia, SBF, UAE, United Arab Emirates

These were the most important geopolitical and economic issues of 2023, including the wars in Gaza and Ukraine, US-China tensions, BRICS expansion, growing de-dollarization, inflation crisis, crypto fraud, bank crashes, European de-industrialization, and more.

Is American Banking Safe? You Might Not Like The Answer

December 6, 2023 Lynn Parramore, Scheer Post. Educate! Banking, Capitalism, Federal Reserve, Finance and the Economy, History, Regulation

As anybody who lived through the Global Financial Crisis of 2008 knows, banking can be hazardous. Failures can hit millions hard, wiping out life savings, tossing the economy into chaos, and messing with investments, spending, and overall growth. Capital requirements are supposed to be crucial buffers shielding banks from catastrophes, rooted in centuries of financial evolution from Alexander Hamilton up through the New Deal regulatory regime and modern international agreements like the Basel Accords. But current regulators’ efforts to raise the capital ratios of big banks to safe levels are strongly opposed by most financiers, sparking debates on finding a balance between stability and financial risk, all amid intense political pressures.

Climate Defenders Arrested While Blocking Entry To NY Federal Reserve

September 19, 2023 Brett Wilkins, Common Dreams. Resist! climate crisis, Direct Action, Federal Reserve, New York City (NYC)

A day after tens of thousands of climate activists marched through Manhattan's Upper East Side demanding an end to oil, gas, and coal production, thousands more demonstrators hit the streets of Lower Manhattan Monday, where more than 100 people were arrested while surrounding the Federal Reserve Bank of New York to protest fossil fuel financing. Protesters chanted slogans like "No oil, no gas, fossil fuels can kiss my ass" and "We need clean air, not another billionaire" as they marched from Zuccotti Park—ground zero of the 2011 Occupy Wall Street movement—to pre-selected sites in the Financial District.

Protest: Federal Reserve Ignoring Systemic Climate Financial Risks

August 26, 2023 Jackie Fielder, Stop the Money Pipeline. Resist! Big Banks, climate crisis, Federal Reserve, Fossil Fuels

The Federal Reserve Bank of Kansas City hosted its 45th annual Economic Policy Symposium titled “Structural Shifts in the Global Economy” in Jackson Hole, Wyoming, starting on Thursday, August 24, 2023. Federal Reserve Chairman Jerome Powell addressed the symposium on Friday and over 100 other central bankers, federal reserve officials, academics, media, financial organizations, international counterparts, and government regulators were also in attendance. One notable major topic has been omitted from the materials released so far: addressing systemic climate financial risk. Compared to global peers, Chair Powell and the Federal Reserve have been laggards in addressing systemic climate financial risks, putting workers, businesses, and the economy at risk.

The Inflation Reality And The Attack On Wages

May 23, 2023 Arthur MacEwan, Dollars & Sense. Educate! Employment, Federal Reserve, Finance and the Economy, Inflation, Interest Rates, Wages

Inflation was slow throughout the second half of 2022. Yet you wouldn’t know this from newspaper headlines, statements from “experts,” or the statements and actions of the Federal Reserve. It was only in January of 2023, when the Consumer Price Index (CPI) for December 2022 was released showing an actual (very small) decline in prices for the month, that there began to be a general recognition that the relatively high rate of inflation of late 2021 and the first half of 2022 had abated. The December 2022 decline of one-tenth of 1% was later revised upward to an increase of one-tenth of 1%, but this tiny increase still brought attention to the easing of inflation.

The Debt Ceiling Debate Is A Massive Deception Against The Public

May 11, 2023 Richard D. Wolff, Popular Resistance. Educate! Congress, Debt Ceiling, Federal Reserve, Finance and the Economy, Taxes

Future historians will likely look back at the debt ceiling rituals being reenacted these days with a frustrated shaking of their heads. That otherwise reasonable people would be so readily deceived raises the question that will provoke those historians: How could this happen? The U.S. Congress has imposed successive ceilings on the national debt, each one higher than the last. Ceilings were intended to limit the amount of federal borrowing. But the same U.S. Congress so managed its taxing and spending that it created ever more excesses of spending over tax revenues (deficits). Those excesses required borrowing to cover them. The borrowings accumulated to hit successive ceilings.

What Causes Inflation?

January 29, 2023 Radhika Desai and Michael Hudson, Geopolitical Economy. Resistance Report Central Bank, Federal Reserve, Finance and the Economy, Inflation

Today’s discussion is focused on inflation and its much-debated return after many many decades. We thought we would structure our discussion around certain key questions. What is inflation? What is the textbook definition? How has it been understood in the past? What causes inflation? What are the supply and demand-side factors? Given that capitalism is considered such a powerful productive machine, why are the most powerful capitalist countries suffering from inflation today? What does it say about their productive system? What is, in fact, causing the current inflation? What is the Federal Reserve in the United States particularly — the most powerful central bank in the world — doing about it, and what’s wrong with what the Federal Reserve, and many other central banks, are doing? So Michael, why don’t you just start with your thoughts on the first question.

St. Louis Fed Breaks All Statistical Rules With Misleading Graph

January 24, 2023 Ben Norton, Geopolitical Economy Report. Educate! China, Federal Reserve, Media, Wars and Militarism

In an attempt to grossly exaggerate China’s defense spending, and simultaneously downplay the US military budget, the Federal Reserve Bank of St. Louis published a jaw-droppingly deceptive graph. If a student presented this in a statistics 101 class, the teacher would likely give them an F. But because it involves Washington’s public enemy number one, Beijing, the US regional reserve bank was awarded a Golden Star for exemplary service in the New Cold War. The St. Louis Fed listed the world’s top six countries by military expenditures, but used two separate axes: the spending of China, Russia, Britain, India, and Saudi Arabia was depicted on the left axis, which went from $0 to $300 billion; but a separate right axis was created just for the United States, which went from $400 billion to $1 trillion.

What Does The Fed’s Jerome Powell Have Up His Sleeve?

December 7, 2022 Ellen Brown, Scheer Post. Educate! Federal Reserve, Finance and the Economy, Inflation

“There is no sense that inflation is coming down,” said Federal Reserve Chairman Jerome Powell at a November 2 press conference, — this despite eight months of aggressive interest rate hikes and “quantitative tightening.” On November 30, the stock market rallied when he said smaller interest rate increases are likely ahead and could start in December. But rates will still be increased, not cut. “By any standard, inflation remains much too high,” Powell said. “We will stay the course until the job is done.” The Fed is doubling down on what appears to be a failed policy, driving the economy to the brink of recession without bringing prices down appreciably. Inflation results from “too much money chasing too few goods,” and the Fed has control over only the money – the “demand” side of the equation.

The Fed’s Response To Inflation Is Another Upward Transfer Of Wealth

December 4, 2022 Chris Hedges, The Real News Network. Resistance Report Chris Hedges, Federal Reserve, Finance and the Economy, Inflation

The Federal Reserve has responded to runaway inflation by hiking up interest rates at the same time that Americans are drowning in historic levels of personal debt. With interest rates up, prices will only rise faster than wages, hitting the vast majority of people with stagnant or declining wages in real terms. The result is yet another upward transfer of wealth to the minority of capitalists responsible for the crisis in the first place. Economist Richard Wolff joins The Chris Hedges Report to discuss the origins of the inflation crisis, the Fed’s response, and what this all means for working people. Richard D. Wolff is Professor of Economics Emeritus at the University of Massachusetts, Amherst and a Visiting Professor in the Graduate Program in International Affairs at the New School. He is the host of the weekly program Economic Update, and the author of several books, including his most recent title, The Sickness in the System: When Capitalism Fails To Save Us From Pandemics or Itself.

The Fed’s Secret Plan To Suck Workers Dry

September 18, 2022 Lee Camp, Mintpress News. Resistance Report Capitalism, Federal Reserve, Finance and the Economy, Health Care, Inflation, Worker Rights and Jobs

We’re still getting over a pandemic. Healthcare costs are totally out of control. Everyone’s in debt and hates their job. The insects are disappearing, which feels like a bad sign. I have to watch a Jeff Bezos interview just to see bug eyes anymore. On top of all that, the bankers at the Federal Reserve have decided they’re going to make things way worse. As reported in Common Dreams, “Federal Reserve Chair Jerome Powell said… that the U.S. central bank is ready to inflict ‘pain’ on households as it continues to fight inflation, remarks that drew widespread backlash from experts who warned the Fed appears poised to spark a devastating recession and mass layoffs.” The Federal Reserve – the privately owned central bank of the U.S. – wants to screw us all some more. So the Fed claims it’s raising interest rates to fight inflation, but that isn’t why they’re doing it.

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