America in the new millennium is not only the military superpower but the financial superpower as well, and at the heart of the system is the Fed,now the central bank to the entire world. Yet the Fed is surrounded in fog and mist like a mythic castle. No one knows its corridors and labyrinths better than Martin Mayer. He has read everything and met everybody and can translate the incantations of the resident Wizard in the castle. If you are an investor, you need Mayer as your guide to the Fed.

The Federal Reserve has entered a new era, and few understand the rules of its game. whereas it once was a regulatory agency controlling what banks did, it now must push directly on the financial markets. What brought about this sweeping change? Why do interest rate changes sometimes move the markets as expected and other times fail to have any effect? What else is the Fed doing that might influence the markets? The links between Fed decisions and market reactions have become far more compli-cated and confusing than ever before.

In The Fed, Martin Mayer, one of the world’s premier financial journalists, sheds new light on the Fed’s changing role, explaining why all the old rules for Fed watchers are no longer relevant and what investors must know to understand the Fed today.

  Preface

PART ONE: MAGIC TRICKS 

Chapter I: The Magican on the World Stage

Chapter 2: The Magician at Home

PART Two: CENTRAL BANKS  

Chapter 3: What Is a Central Bank?

Chapter 4: The Question of Independence

PART THREE: AVOIDING CATASTROPHE  

Chapter 5: The System and Its Risks

Chapter 6: The Amen’can Lender of Last Resort

PART FOUR: MAKING MONEY 

Chapter 7: The Age of Invention

Chapter 8: Monetary Policy in the Maehtrom

Chapter 9: Disaster Time

Chapter 10: Greenspan and the Markets

Chapter 11: IntetnaEonally

PART FIVE: THE DAY JOBS   

Chapter 12: The Payments Franchise

Chapter 13: Supervin’ons

Chapter 14: The Fed and the Poor

PARr SIx: WHAT’S NEXT?  

Chapter 15: The Fed in Our Future

  Notes

  Index