Fed

Inflation is going away for a while

Posted 7 weeks 5 days ago by Philip Brewer

For a decade, starting in the mid-1990s, the Federal Reserve kept interest rates too low and expanded the money supply too quickly. Their theory was that, as long as consumer prices were stable, they must not be creating too much money. We now know that they were wrong.

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Possible protections for credit card holders

Posted 27 weeks 6 days ago by Philip Brewer

Credit Cards, Consumer Affairs

The Federal Reserve has proposed some new rules to protect people from a list of abusive lending practices. The changes aren't in effect yet, and may not actually go into effect. It's worth looking at the proposals, though, to understand what's been going on just lately. If you haven't been paying attention, you probably have no idea what the credit card companies can legally do to you.

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Federal Reserve cuts the discount rate

Posted 1 year 15 weeks ago by Philip Brewer

Personal Finance

In response to the recent credit squeeze, the Federal Reserve did something unusual: they cut the discount rate without cutting the federal funds rate. The federal funds rate is the rate at which banks lend to one another. The discount rate is the rate at which the Fed itself will lend money to banks. For the past few years, the Fed has closely coordinated changes in these rates, so to change one without changing the other is a departure.

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