THE FED

In The Fed, one of the world's best financial journalists offers a major new explanation of how the Fed works and how its world has changed. Martin Mayer is the bestselling author of The Bankers and The Bankers: The Next Generation, among many other books. He knows more about the banking system, the markets, and the Federal Reserve than anyone else writing today. The Fed is the first book to explain why all the old rules for Fed watchers are no longer operative, and what it is that investors must know to understand the Fed today. For anyone who wants to know why Alan Greenspan is hailed as the second most powerful man in the United States, The Fed is essential reading.

Mayer offers many behind-the-scenes stories from past and present Fed administrations, and he explains the overlooked significance of recent dramatic expansions in the Fed's powers and perks. Why does the Fed care about the difference between 30-year and 29-year bond yields? Why and how did the Fed join with its district banks in organizing the bailout of Long Term Capital Management? How was the age-old war between the Fed and the Comptroller of the Currency finally resolved in 1999? Why has the increased "sunshine" of announcing market interventions and posting proceedings of the Federal Open Market Committee not led to greater market stability? Why did Greenspan make the key decision of the Clinton boom years -- to let the good times roll while unemployment sank to record lows -- despite all historical evidence that it would be inflationary? These are just some of the questions answered in this wide-ranging, sharp, and entertaining book.