The Federal Reserve Board of Governors opted again to do nothing after their two-day meeting, remaining pat despite clear evidence of a slowing in the economy and a miss on their two mandates, on maintaining full employment and price stability.

The Federal Reserve decided to continue their “Operation Twist” program until the end of the year. It was scheduled to expire this month. The vote of the Federal Open Market Committee was nearly unanimous, with only Jeffrey Lacker of the Federal Reserve Bank of Richmond opposing the move. Here’s the full policy statement by the [...]

An important meeting takes place at the Federal Reserve, where the concerns about inflation have been well above the concerns for the unemployment crisis. Today, with the economy at stall speed, the Fed’s policymaking board meets for the next two days to decide whether or not to change course, and they have more options than they’ve considered so far.

The Federal Reserve released their statement after an unusual two-day meeting to assess possibilities for expanding monetary policy. As expected, they plan to do a version of “Operation Twist,” where they swap short-term debt for long-term debt in an attempt to lower long-term interest rates.

In a rare attempt to intervene in the policymaking of an independent agency, the four top Republicans in the House and Senate wrote a letter to Federal Reserve Chair Ben Bernanke, warning him against further steps to use monetary policy to boost the struggling US economy.

Now that we’ve determined that the economy is destined for a decade or more of depressed growth with no hope, it’s perhaps a small comfort that one important policymaker actually views this as a huge problem which he could play a role in solving. Charles Evans of the Chicago Federal Reserve released a paper yesterday spelling out why high unemployment is a huge failure of Fed policymakers.