In its continuing efforts to nurture the fragile economic recovery, the U.S. Federal Reserve is widely expected to leave interest rates at record lows when it concludes its meeting today (Wednesday).
However, observers will be closely examining the details of the language in the statement of the Federal Open Market Committee (FOMC) meeting for hints as to when it plans to change monetary policy.
The overwhelming consensus is that the Fed will hold the federal funds rate steady at near-zero until the second half of next year. But that assumes the economic growth will stay in line with the Fed's current forecast - a weak recovery with subdued inflation and slow growth.
Bernanke: Asian Consumer Spending, Cutting U.S. Deficit Are Keys to Avoiding Trade Imbalances
Asian countries need to rely less on export-led growth and encourage their consumers to spend more, while the United States needs to trim its deficit to avoid pre-recession trade imbalances, U.S. Federal Reserve Chairman Ben Bernanke said yesterday (Monday). Governments in trade surplus countries – most of which include Asian nations – must act to [...]
Hidden Traps Make Bank Stocks a Bad Deal
Billionaire investor George Soros said yesterday (Monday) that the U.S. recovery would be a slow one because of all the "basically bankrupt" financial companies impeding it. U.S. Federal Reserve Chairman Ben S. Bernanke and Congress agreed Friday that the financial system – not the American taxpayer – should bear the costs of bank bailouts. Sheila [...]
Unemployment Figures Increase Odds of Jobless Recovery
The number of unemployed Americans jumped more than expected in September, raising the unemployment rate to 9.8%, the highest level since 1983. The latest data suggest the odds are increasing that the economy may be suffering through its second “jobless recovery” in eight years. U.S employers cut 263,000 jobs from payrolls in September the Labor [...]
Boom, Bust and Rebuild: Bank of America and the Kenneth Lewis Legacy
There are many ways to view Kenneth Lewis' eight-year reign as Bank of America Corp. (NYSE: BAC) chief executive, but two seem to hold the most landscape. On one hand, the $130 billion he spent on acquisitions – FleetBoston Financial Corp., MBNA Corp., LaSalle Bank Corp., Countrywide Financial Corp., Charles Schwab Corp.'s (Nasdaq: SCHW) U.S. [...]
The New "Death Panel" for Savers
In their official statement Wednesday, U.S. Federal Reserve policymakers said they “continue to anticipate that economic conditions are likely to warrant exceptionally low levels of the Federal Funds Rate for an extended period.” That means interest rates will remain at artificially low levels for some time to come. And it also means the central bank’s [...]
Fed Says Economy Picks Up But Keeps Lid on Interest Rates
The Federal Reserve Open Market Committee (FOMC) today (Wednesday) said that the economy has improved, but kept the benchmark interest rate target at all-time lows, indicating that it is determined to nurture a budding economic recovery by providing liquidity to the financial sector. Economic activity is "picking up," the Fed statement said. The statement was [...]
The Only Way to Profit From a Stock Market Bubble
Former U.S. Federal Reserve Chairman Alan Greenspan said it was impossible to tell a bubble while you were in it. Well Alan, I’ve got news for you: We’re in one now. The Standard & Poor’s 500 Index is up 58% from its March lows, gold has finally broken through the $1,000-an-ounce level – and may [...]
New Data Show Slow Recovery for U.S. Housing and Unemployment
Recent data suggests that crises in the job and housing markets have begun to subside. But a thorough examination of the numbers suggests the U.S. economy still has a lot of healing to do. Government reports released today (Thursday) revealed the number of Americans filing initial claims for unemployment benefits was lower than forecast last [...]
Gold Prices Soar to 18-Month High on Dollar Weakness, Inflation Fears
Gold bugs pushed the gold prices to an18-month high today (Wednesday), as rattled investors focused on renewed weakness in the U.S. dollar and the looming potential for runaway inflation. Those factors combined to push gold as high as $1,023.30 an ounce, the loftiest level since late March 2008. The case for inflation was bolstered by [...]