Fiscal Entanglements Begin
The Federal Open Market Committee (FOMC) meets today for a second day of deliberations on the forecast for the U.S. economy. The main focus today will be the likely announcement that the Fed will begin tapering its stimulus efforts by reducing the amount of bonds being purchased monthly from $85 billion to $75 billion. Even with this slight adjustment the Fed will continue their stimulus going into the U.S. economy and interest rates should hold at their current low levels for some time in the future.
Janet Yellen, Ph.D., Vice Chairwoman of the Board of Governors of the Federal Reserve System
With Larry Summers out of the picture to succeed outgoing Fed Chairman Ben Bernanke, Federal Reserve Vice Chairwoman Janet Yellen immediately became the front-runner. Yellen’s supporters are now emboldened more than ever to continue pushing her candidacy even amidst the evident strained relationship between the White House and Senate Democrats that emanated from the Summers candidacy. The strained relationship between the White House and Senate Democrats will not bold well for them in the fiscal battles ahead.…
