The Federal Reserve is still going all-in on its efforts to stimulate the U.S. economy, Chairman Ben Bernanke announced Wednesday, surprising experts who had predicted the Fed would taper its stimulus efforts.
Instead, the Fed will continue its $85-billion monthly bond buys — a monetary-policy technique known as “quantitative easing” — that are intended to lower interest rates, support the housing market, and stimulate economic growth.
The Fed’s monetary-policy committee has been saying for months it will begin scaling back the bond buys when it is confident in the strength of the U.S. economy, and many predicted that the panel would make that decision following the two-day meeting that ended Wednesday.
But in a statement following the meeting, the committee said it preferred to take a wait-and-see approach with economic growth.
“The Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy,” the committee said in a statement following the meeting. “However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.”
The Fed will also continue the other pillar of its stimulus plan: keeping the federal funds rate low for banks, another policy aimed at keeping money circulating throughout the economy.
Since the financial crisis, Bernanke’s Fed has gone to great lengths to attempt to stimulate the economy, and the chairman has faced great criticism for it. Congressional Republicans have pilloried Bernanke — who was first appointed by former President George W. Bush — over the stimulus efforts, saying they have left the economy at risk for future inflation.
Thus far, inflation remains well below the bank’s target rate of 2 percent, and the committee Wednesday said it did not expect inflation to rise sharply in the future. According to a set of economic forecasts released alongside the policy statement, the Fed expects inflation to remain below 2 percent through 2016, and remain at between 1.1 percent and 1.2 percent for the rest of 2013.
The central bank did, however, predict upcoming decreases in the unemployment rate. The unemployment rate sat at 7.3 percent in August, but the Fed projected Wednesday that it would fall to between 6.4 percent and 6.8 percent in 2014, and to as low as 5.9 percent in 2015.
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Foreign Policy takes a look at the future of mining the estimated "100,000 near-Earth objects—including asteroids and comets—in the neighborhood of our planet. Some of these NEOs, as they’re called, are small. Others are substantial and potentially packed full of water and various important minerals, such as nickel, cobalt, and iron. One day, advocates believe, those objects will be tapped by variations on the equipment used in the coal mines of Kentucky or in the diamond mines of Africa. And for immense gain: According to industry experts, the contents of a single asteroid could be worth trillions of dollars." But the technology to get us there is only the first step. Experts say "a multinational body might emerge" to manage rights to NEOs, as well as a body of law, including an international court.
Not to be outdone by Jeffrey Goldberg's recent piece in The Atlantic about President Obama's foreign policy, the New York Times Magazine checks in with a longread on the president's economic legacy. In it, Obama is cognizant that the economic reality--73 straight months of growth--isn't matched by public perceptions. Some of that, he says, is due to a constant drumbeat from the right that "that denies any progress." But he also accepts some blame himself. “I mean, the truth of the matter is that if we had been able to more effectively communicate all the steps we had taken to the swing voter,” he said, “then we might have maintained a majority in the House or the Senate.”
Ronald Reagan's children and political allies took to the media and Twitter this week to chide funnyman Will Ferrell for his plans to play a dementia-addled Reagan in his second term in a new comedy entitled Reagan. In an open letter, Reagan's daughter Patti Davis tells Ferrell, who's also a producer on the movie, “Perhaps for your comedy you would like to visit some dementia facilities. I have—I didn’t find anything comedic there, and my hope would be that if you’re a decent human being, you wouldn’t either.” Michael Reagan, the president's son, tweeted, "What an Outrag....Alzheimers is not joke...It kills..You should be ashamed all of you." And former Rep. Joe Walsh called it an example of "Hollywood taking a shot at conservatives again."
In a sign that she’s ready to put a longer-than-expected primary battle behind her, former Secretary of State Hillary Clinton (D) is no longer going on the air in upcoming primary states. “Team Clinton hasn’t spent a single cent in … California, Indiana, Kentucky, Oregon and West Virginia, while” Sen. Bernie Sanders’ (I-VT) “campaign has spent a little more than $1 million in those same states.” Meanwhile, Sen. Jeff Merkley (D-OR), Sanders’ "lone backer in the Senate, said the candidate should end his presidential campaign if he’s losing to Hillary Clinton after the primary season concludes in June, breaking sharply with the candidate who is vowing to take his insurgent bid to the party convention in Philadelphia.”
The team behind the bestselling "Clinton Cash"—author Peter Schweizer and Breitbart's Stephen Bannon—is turning the book into a movie that will have its U.S. premiere just before the Democratic National Convention this summer. The film will get its global debut "next month in Cannes, France, during the Cannes Film Festival. (The movie is not a part of the festival, but will be shown at a screening arranged for distributors)." Bloomberg has a trailer up, pointing out that it's "less Ken Burns than Jerry Bruckheimer, featuring blood-drenched money, radical madrassas, and ominous footage of the Clintons."