FinanceFilter: Is the money supply contracting, or expanding, after netting all the Fed action, bank closures, mortgage defaults, etc? The dollar falling seems to signal a net increase of money supply, but this is inconsistent with the thesis of a credit or liquidity crunch. If the money supply is growing at a slower rate due to tighter lending practices, shouldn't the dollar be rising, even in the face of Fed-rate cutting? Do we know the net expansion or contraction of the money supply due to the combination of rate cuts and mortgage defaults? I understand that Fed rate cuts have the effect of increasing the money supply. I understand that lower rates lower the value of the dollar, because it puts more dollars into existence tomorrow than existed today, i.e. given a constant demand, the increase of supply lowers the price.

Every time the US federal reserve meets to decide on changing interest rates, the news articles say something like "in their statement the fed says ...". So my question is where can I find a listing of the statements for the past 10 or 20 years? I'd like to see how the words change over time. My ideal answer if a link to a webpage that has them somehow. But just knowing the official term for these statements or if they get published officially anywhere would be immensly useful.

Filed under: Interest rates Fixed-rate mortgages hit their highest average level since July 2002 last week, according to Freddie Mac.  Last week ended with the average 30-year fixed rate mortgage at 6.49% -- up from 6.43% the week before. But signals now being sent by Federal Reserve governors indicate we may finally be seeing an end to the ballooning rates.  That will be good news for the housing industry, which has seen a softening of housing demand over the past few months.  In fact Richard DeKaser, chief economist for the financial holding company National City Corp., believes the softening “will continue and may likely accelerate.” Good news for home buyers and sellers is that yesterday two Fed governors spoke publicly signaling that the Fed may soon halt interest rate increases.  Fed governor Donald Kahn told an Oklahoma City audience, “The economy is in transition to a sustainable pace of growth, in which case policy likely will be in transition as well. I do not know how much policy firming" (translated -- additional rate increases) "will be needed."   Fed governor Susan Bies told reporters after a Los Angeles event, "We are getting closer to the stopping point." So will we see another interest rate increase when the Fed meets May 10 or not? Read     Read     Permalink     Email this     Linking Blogs     Comments