Word: feds
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Dates: during 1970-1979
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...Volcker took over as Federal Reserve chairman, businessmen's basic cost of borrowing money has jumped from 11.75% to 13.5%, the highest in history. Most board members hold that the increases will soon stop but interest rates will remain steep over the next year. Some fear that the Fed may worsen the recession by inducing a classic credit crunch, in which little money is available for borrowing to finance new plants and create jobs...
Democrat Arthur Okun complains that the Fed has lost much of its control over credit policy as a result of innovations, such as money market certificates and mortgage-backed securities, that are designed to keep banks and thrift institutions flush with funds for home loans. Says Okun: "Money is easy but expensive, and nobody is saying no to any borrower. They're saying, 'The price is high. Won't you take...
...more than seven weeks, tall, taciturn Paul A. Volcker has lost no time in establishing himself as a staunch inflation fighter, dollar defender and hard-liner on interest rates. Since he took charge on Aug. 6, the key rates used to manipulate credit policy have shot up dramatically. The Fed last week raised the discount rate, which is the interest it charges on money that it lends to member banks, by a half-point, to 11%, a record high. Several major banks then boosted their prime rate by a quarter-point, to 13¼%, also a record. That...
...borrowers. Indeed, the money supply grew at a fast annual rate of close to 13% in the past two months. Though Volcker feels that the growth should be curbed, the spread of such financial innovations as credit cards and savings certificates tied to Treasury bill rates have lessened the Fed's ability to control the nation's money stock...
...Fed's latest discount rate increase prompted a rare rebellion among its seven governors. Three of them opposed the move, saying it would seriously worsen the slowdown in the economy. There are signs that the recession will be deeper and longer than was predicted only three months ago. So some economists dispute Volcker's assertion that "what basically is good for the dollar is good for the economy at home." They are fearful that in his zeal to raise interest rates to buttress the buck abroad, he will worsen the Interest rates have been rising through the industrialized...