Dec 16, 2013
FRB | Notifications December 16, 2013: Concluding remarks by Chairman Bernanke at the ceremony commemorating the centennial of the Federal Reserve Act
I have been asked to close this ceremony marking the 100th anniversary of the signing of the Federal Reserve Act--the law that created the Federal Reserve--by looking ahead to the next century. Given the well-known difficulties that economists have in forecasting even the next few quarters, I will happily point out one important advantage in making a 100-year forecast, which is that I won't be around to explain why the forecast went wrong. Our ability to make accurate long-term forecasts is limited, to say the least. Nevertheless, I will venture one prediction that I don't think is too bold, which is this: The values that have sustained and served the Federal Reserve at its best, and have permitted it to make critical contributions to the economic health of our nation during the past century, will continue to serve it and the nation well in the century ahead.
Among the Fed's most important values is the belief that policymaking should be based on dispassionate, objective, and fact-based analysis. The ideal we seek is a combination of the researcher's intellectual rigor and the ability of the effective policymaker to navigate the messiness of the real world, a world that includes complex institutions and markets, imperfect and incomplete data, and often-unpredictable human behavior.
Of course, policy analysis and implementation of the highest quality do not just happen. They require professionalism and a commitment to public service as exemplified by the generations of staff members who have served this institution so well. Without the expertise and creativity embodied in the staff, it would have been impossible to develop the innovative policies required to meet, in the words of the Federal Reserve Act, the "unusual and exigent circumstances" we confronted during the recent financial crisis. If there is one thing on which I believe all of us here can agree, it is that the quality of the staff has been a great strength throughout our institution's history. Maintaining that quality and commitment to public service will be essential if the Fed is to have a successful second century.
Dispassionate analysis, expertise, and commitment to public service--all are values that have served us well. But one value that strikes me as having been at least as important as any other has been the Federal Reserve's willingness, during its finest hours, to stand up to political pressure and make tough but necessary decisions. The fight against inflation during Paul and Alan's times in office was critical for the nation's longer-term prosperity, and it required perseverance in the face of heavy criticism. I keep in my office one of the 2-by-4s mailed to the Fed during Paul's tenure, which communicates some distinctly unfavorable views of high interest rates and their effects. More recently, of course, the Federal Reserve took controversial but necessary measures to arrest what was arguably the worst financial crisis in American history, helping to avert what likely would have been a much more severe economic downturn than the Great Recession we did experience.
We have been able to respond nimbly to economic emergencies and make difficult choices in part because of our institutional structure--including long terms for members of the Board of Governors and diverse regional representation in our policymaking Committee--and because of the willingness of policymakers, past and present, to do whatever was needed in the longer-run interest of the economy. As an institution, the Federal Reserve must continue to be willing to make tough decisions, based on objective, empirical analysis and without regard to political pressure.
But, finally, we must also recognize that the Fed's ability to make and implement such decisions ultimately depends on the public's understanding and acceptance of our actions. For this reason, we must continue to emphasize two other essential values--transparency and accountability. We must do all that we can to explain our actions and to show how they serve the public interest. That's why we must welcome communication, broadly defined. Of course, we will continue to talk to economists and market participants, but that is not enough. Ultimately, the legitimacy of our policies rests on the understanding and support of the broader American public, whose interests we are working to serve. The ability of this institution to support a healthy economy--an economy with high levels of employment, low inflation, and a stable financial system--will require our continued efforts to engage in two-way communication--explaining our actions and, importantly, listening to what our fellow citizens have to say.
Let me end by thanking the organizers of this event and, in particular, all of the past and present policymakers in attendance for helping us mark this centennial milestone in such a memorable fashion.
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European Markets at Close Report by CNBC December 16, 2013: Europe Shares Close Higher; Fed in Focus
European equities rallied on Monday to close higher and end a four-day losing streak, as data from the euro zone managed to outweigh any caution over the possibility the U.S. Federal Reserve could moderate its stimulus measures. U.S. stocks also rallied on Monday trade.
The FTSEurofirst 300 index provisionally closed higher, with all sectors posting gains.
Flash composite purchasing manager's index (PMI) figures released by Markit on Monday showed that business activity for the euro zone in December was above expectations. The figure rose to 52.1 against 51.9 for November. The figures for Germany showed a slight drop but continued to show an expansion in the sector with the December composite PMI falling to 55.2 versus 55.4 in November.
In France, however, the composite PMI index fell to a seven-month low of 47.0 in December, below November's final reading of 48.0. "The last flash PMI readings for 2013 paint a worrying picture on the health of the French economy," Markit's senior economist Andrew Harker said in a note.
(Read More: French economy struggles as Germany strides ahead)
To read full report click: www.cnbc.com/id/101274427
FTC | Enforcement Actions December 16, 2013:: FTC Moves Against Massive Mobile Cramming Operation That Heaped Millions in Unwanted Charges on Consumers’ Bills
Federal Reserve Board Notification December 16, 2013: Industrial production increased 1.1 percent in November after having edged up 0.1 percent in October...
Industrial Production and Capacity Utilization - G.17
Industrial production increased 1.1 percent in November after having edged up 0.1 percent in October; output was previously reported to have declined 0.1 percent in October. The gain in November was the largest since November 2012, when production rose 1.3 percent. Manufacturing output increased 0.6 percent in November for its fourth consecutive monthly gain. Production at mines advanced 1.7 percent to more than reverse a decline of 1.5 percent in October. The index for utilities was up 3.9 percent in November, as colder-than-average temperatures boosted demand for heating. At 101.3 percent of its 2007 average, total industrial production was 3.2 percent above its year-earlier level. In November, industrial production surpassed for the first time its pre-recession peak of December 2007 and was 21 percent above its trough of June 2009. Capacity utilization for the industrial sector increased 0.8 percentage point in November to 79.0 percent, a rate 1.2 percentage points below its long-run (1972-2012) average.
Industrial Production and Capacity Utilization: Summary
Economic News December 16, 2013.
European Central Bank Executive Board member Joerg Asmussen is to leave the bank to take up a new job in Angela Merkel's coalition government, depriving ECB of one of its key policymakers at a time when the euro area is climbing a thorny path to recovery. (Dec 16, 2013) Full Article
British households' perception of their financial wellbeing remained downbeat in December, while their expectations for personal finances in the future turned less pessimistic, data from a survey by Markit Economics revealed Monday. (Dec 16, 2013) Full Article
Sales of new private homes in Singapore increased significantly in November from the previous month, driven by strong sales from new projects, data released by the Urban Redevelopment Authority showed Monday. (Dec 16, 2013) Full Article
The European Central Bank cannot stimulate euro area growth single-handedly and it will not do the governments' work, the central bank president Mario Draghi said. In an interview with the French weekly paper Le Journal du Dimanche on Sunday, Draghi said, "We will not do governments’ work for them." (Dec 16, 2013) Full Article
The International Monetary Fund (IMF) on Monday urged the Indonesian government to press on with reforms to strengthen the economy, and cautioned that GDP growth will be sluggish in the medium term. (Dec 16, 2013) Full Article
Eurozone's trade surplus increased in October from a year earlier, the latest data published by Eurostat revealed Monday. (Dec 16, 2013) Full Article
With output increasing by much more than previously estimated, the Labor Department released a report on Monday showing a notable upward revision to the pace of U.S. labor productivity growth in the third quarter of 2013. (Dec 16, 2013) Full Article
While the Federal Reserve Bank of New York released a report on Monday showing that its index of regional manufacturing activity bounced back into positive territory in December, the bank said conditions for New York manufacturers were flat. (Dec 16, 2013) Full Article
Forex Top Story
An index monitoring business sentiment in Japan gained broadly in the fourth quarter of 2013, the Bank of Japan revealed on Monday in its quarterly Tankan business survey - although the survey suggests somewhat less optimism for the first quarter of next year. (Dec 16, 2013) Full Article
Asking prices for a property in the U.K. could rise by up to 8 percent next year unless the growing demand is countered by sufficient supply, online real estate portal Rightmove said Monday.(Dec 16, 2013) Full Article
China's factory sector activity slowed in December as output growth weakened and employment contracted further, preliminary results of a survey published by Markit Economics revealed Monday. The headline HSBC purchasing managers' index fell to a three-month low of 50.5 in December from 50.8 in November. However, the above-50 reading indicates expansion of the sector. (Dec 16, 2013) Full Article
A faster increase in food prices drove India's headline inflation to its highest level in fourteen months in November, government data showed Monday, adding to expectations that the Reserve Bank of India will hike policy rate at its upcoming monetary policy review on Wednesday. The wholesale price index, the main gauge of inflation in the country, rose 7.52 percent year-on-year in November. (Dec 16, 2013) Full Article
Euro area's private sector growth accelerated more-than expected in November, supported by strong performance by the manufacturing sector as an above-trend expansion in Germany more than offset a further slump in France. (Dec 16, 2013) Full Article
The price of gold was moving lower Monday morning even as the US dollar trading weak versus a basket of currencies ahead of a two-day meeting of the U.S. Federal Reserve, starting Tuesday. (Dec 16, 2013) Full Article
The price of crude oil was moving higher Monday morning, with the US dollar trading weak versus a basket of currencies. Also, upbeat euro zone manufacturing data helped lift trader sentiment. (Dec 16, 2013) Full Article
Former President Michelle Bachelet has won Chile's presidential election, defeating her rival and the ruling right-wing coalition's candidate Evelyn Matthei by a wide margin in the run-off.(Dec 16, 2013) Full Article
German Finance Minister Wolfgang Schaeuble said on Monday that it would be a good idea to consider Bundesbank Vice President Sabine Lautenschlaeger as the replacement for Joerg Asmussen on the European Central Bank's Executive Board. (Dec 16, 2013) Full Article
The Australian dollar slipped against other major currencies in Asian deals on Monday, as China's manufacturing sector activity declined to a three month low in December. (Dec 16, 2013)Full Article
The Japanese yen strengthened against other major currencies on Monday's Asian deals as weak China manufacturing sector activity and uncertainty about the Federal Reserve's bond purchase program, prompted buying of safe-haven assets. (Dec 16, 2013) Full Article
The euro advanced in early deals on Monday as euro-zone's private sector growth accelerated more-than expected in December and trade surplus came in above predictions in the month of October. (Dec 16, 2013) Full Article
The EU-Turkey readmission agreement was signed and the EU-Turkey Visa liberalization dialogue was launched in Turkish capital Ankara on Monday. (Dec 16, 2013) Full Article
European Commissioner for Regional Policy Johannes Hahn on Monday approved EU financial support worth EUR2.97 billion to allow the building of four motorways in Greece. (Dec 16, 2013) Full Article