Fed holds interest rates steady in final policy meeting of tumultuous year; signals borrowing costs will not change anytime soon
The policy decision left the Fed’s benchmark overnight lending rate in its current target range between 1.50% and 1.75%, three-quarters of a percentage point below where it started the year
Paul Volcker was a great economist but his greatest lesson wasn’t on economics, it was on being a public servant
Regardless of what those answers turn out to be, the life of Paul Volcker offers guidance about the values they might want to embrace in seeking them.
The Austrian School of Economics predicts that America's economic woes cannot be ended with more liberal and free money. But that is exactly what the US Fed may end up doing for fear of another economic collapse.
The problem is that while the urban cooperative banks are not allowed to carry out dual financing, there is nothing that stops scheduled commercial banks from doing the same.
Can Rajan like Volcker did, bring inflation under control by raising interest rates? Or can he just keep sending signals to the government by raising interest rates to get its house in order, so that inflation can be brought under control?
It is unclear if regulators will seek CEO imprisonment or hefty fines as potential penalties for violating the Volcker rule. Whatever regulators might put in place, fines would be a far more likely punishment if any are ever doled out, banking lawyers said.<br /><br />
But that does not mean policymakers in developing countries can lower their inflation guard. Talk of currency wars has not gone away.