Tuesday, May 24, 2011

Kansas City and Dallas want separate monetary zones

Most Federal Reserve regional banks, cautious about the economic outlook amid rising commodity prices, last month voted to hold steady the low discount rate.

Ten of the Fed’s 12 district banks voted to keep the discount rate unchanged at 0.75%, according to minutes released Tuesday. Directors from the Kansas City and Dallas Fed called for an increase in the rate to 1%.WSJ

Their economies are not based on large federal bureaucracies, so why should they be tied to the DC yield curve?

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