Don Kohn

James Politi

Don Kohn is set to end his tenure as vice-chairman of the Federal Reserve tomorrow, but, at the request of his boss Ben Bernanke, he will be staying on as governor until September 1 at the latest.

The hope within the central bank is that as early as next month the Senate will begin to move towards confirming Mr Kohn’s replacement, Janet Yellen, currently president of the Federal Reserve Bank of San Francisco.

Also on the Senate’s docket are the nominations of Peter Diamond, the Massachusetts Institute of Technology economist, and Sarah Bloom Raskin, the Maryland banking regulator, which would complete the seven-member board of governors.

Their nominations have stalled in Congress mainly for logistical reasons: 

James Politi

In terms of monetary policy, the message from senior Federal Reserve officials today was not to read too much into their pledge of keeping interest rates low for an “extended period”.

In separate speeches, Donald Kohn, the vice-chairman, and Narayana Kocherlakota, president of the Minneapolis Fed, made clear that the phrase could mean pretty much anything under the sun, since the timing of any policy tightening would be determined by the health of the economy. 

James Politi

Are US consumers falling back into the same old spending patterns that got them into so much trouble in during the recession?

Data released today showed that the US savings rate fell to an eighteen-month low of 2.7 per cent in March, as Americans spent more than they earned: consumption rose by 0.5 per cent, much faster than a 0.3 per cent increase in personal income.