Federal Reserve blames Congress sequester cuts for US economic woes

[alp227]

Source: The Guardian

The Federal Reserve has explicitly criticised budget cuts imposed by Congress, blaming fiscal policy for holding back the US's economic recovery.

After a two-day meeting, the Federal Open Markets Committee (FOMC) said on Wednesday in a statement that despite signs of recovery "fiscal policy is restraining economic growth". The statement is the FOMC's boldest assertion to date that Washington policy is hampering the US's fragile economic recovery. It stands in marked contrast to last month's more cautious statement, which said "fiscal policy has become somewhat more restrictive".

The FOMC released its statement after two key reports suggested that recovery in the jobs market is slowing, as end of year tax hikes and budget cuts – known as sequestration – seem to take their toll.The Fed announced on Wednesday that it would keep pumping $85bn a month into the US economy, citing concerns about the impact Washington's budget cuts are having on the US recovery.

Dan Greenhaus, chief strategist at the trader BTIG, said: "They increasingly view fiscal policy as an impediment to what they've been trying to accomplish and today's statement is an outright affirmation of that view. Fiscal policy 'is' restraining growth, from the Fed's point of view. And as long as fiscal policy remains constrictive, then the Fed are likely to do more rather than less."

Read more: http://www.guardian.co.uk/business/2013/may/01/federal-reserve-congress-cuts-policy

[freshwest]

1. But austerity is a winner! These guys said so!

Courtesy of EarlG.

[wellspring]

2. Yeppers, austerity will solve everything.

Can't eat prunes on a full stomach, now.

Austerity may make some pucker.

But that's where the prunes come in. From overseas. Austerity will have REAL Americans making a killing by outsourcing prune juice.

It's

going.

to work.



Now, say someone's in cardiac arrest. The paramedics show up and take out the defibrillator.

But wait a minute. You don't have to be doin that. It might run down the batteries. The battery department might go into the red. Let the economy die. The government's check book is more important than yours.

You wanna know how to make the economy go up? Just strangle everybody. Instantly the economy will go up.

Same with toxic waste, by the way. You wanna know the secret to joy, happiness, ecstasy and prosperity? Simple. Just dump some toxic waste in the woods. When you get home, instantly your bank account will be bigger.

This is what we call the Magic Job Theory.

It's guaranteed!

[freshwest]

3. Don't ya just hate it though? I don't like that plan very much.

[DallasNE]

4. Larry Kudlow Speaks Of Bernanke In The Past Tense

The other day he had a segment on who would replace Bernanke in 2014. He was even plugging Paul Ryan as a replacement.

Now I understand why Kudlow had his shorts all in a bunch. 100% guarantee, Paul Ryan will not be Fed Chairman in 2014. In fact, I expect Obama will again nominate Bernanke for a new term.