CNN news 2014-05-11 加文本

cnn news 2014-05-11

CARL AZUZ, cnn ANCHOR: This Thursday, May 8, we are happy to have you along for cnn STUDENT NEWS. I`m Carl Azuz. You might not have heard of synthetic drugs. This can describe a wide range of chemical substances that mimic the effects of other drugs like marijuana or heroine. The U.S. government says synthetic drugs can be even more dangerous than then illegal ones they try to imitate. Synthetic ingredients are sometimes more potent. They are untested. The names in ingredients are often changed to prevent drug busts, but that doesn`t always work. Yesterday, the government announced more than 150 people have been arrested over the past four months for making or selling synthetic drugs. Police seized hundreds of thousands of drug packages and more than $20 million in cash and other assets.

The government`s particularly concerned about synthetic drugs in part because a 2012 survey found that one in nine high school seniors said they used synthetic marijuana. That was that group`s second most frequently used drug behind actual marijuana.

Next up today, Janet Yellen, she`s the leader of the Federal Reserve, the Central Bank of the U.S. She expects the U.S. economy to grow "somewhat faster than it did last year. But she has some concerns. For one, the U.S. housing market. It`s weak, homes are at selling as well as economists expected. One thing the Fed`s doing is keeping interest rates low to encourage people to borrow money for purchases like houses.

Interest rates are one tool at the Fed`s disposal.

ZAIN ASHER, cnn CORRESPONDENT: So, we`ve had that phase that, you know, money makes the world go around, but you may have asked yourself once or twice, OK, well, who makes the money go around? So, the answer is the Federal Reserve or as my friends and I like to call it, the Fed.

So, the Fed is pretty much unlike any other U.S. institution that I can think of.

It`s run by board of governors based in Washington D.C., it has 12 (INAUDIBLE) banks located around the main banking centers of the country, some places like New York, San Francisco, Philadelphia.

Presidents of these banks and the board of governors, they meet eight times a year to make big policy decisions and to ensure the economy is moving at a stable (INAUDIBLE).

So, Congress oversees the Fed, but the Fed doesn`t really answer to Congress. The Fed operates completely independently because it doesn`t care about politics. All it cares about is basically two things: number one, keeping prices stable and number two, trying its best to ensure that everybody who wants the job gets one. So, if the economy is heating up, it tries to cool things down by raising the cost of borrowing, my making it harder to borrow money. And if things are getting too cold, it does the opposite. So, you can sort of think of the Fed like Goldilocks. It doesn`t really like things too hot, too cold, it wants everything to be just right.

So, you probably want to ring - OK, well, you know, how does the Fed work its magic? What its secret weapon? The answer is, interest rates.

So, the way the Fed gets interest rates at just that right level at that sweet spot is through buying and selling U.S. Treasuries and other bonds. So, when it wants to cool the market down it sells you as treasuries. Stashes away the cash, and not reduced the money supply. So, that makes it harder to borrow money, and that basically slows down economic growth.

When really wants to heat the market up, it essentially starts buying up U.S. treasuries and other bonds that floods its markets with cash and fuels economic growth. So, it`s not necessarily a perfect system, but it works, at least for now, and as they say on Wall Street, don`t fight the Fed.