Housing Still a Drag: Fed Chief

For those who can't remember 1981, rates are headed up

(NEWSER) - There's a generation of consumers out there that can't fathom 8% interest, much less 1981's peak of 18.2%, but the days of free or cheap money are coming to a rapid close. With national debt ballooning, inflation looming, and government props that suppressed interest rates ending, the cost of credit is headed for a long upward climb, reports the New York Times . More»

Banks get trillions, fixed-income investors get screwed: Sloan

(NEWSER) - Not fed up enough with just putting your taxpayer dollars directly on the line to bail out the nation’s banks? Allan Sloan has latched on to some insidious “collateral damage” from the government’s rescue plan, those trillions spent “to keep interest rates down to support the economy and prop up housing prices.” That’s all well and good, he writes, until you realize that returns on traditional investments for fixed-income folk have taken a nosedive. More»

Economy picking up, but not enough that inflation is a worry

(AP) - The Federal Reserve says the recession is easing, but that the economy likely will remain weak and keep a lid on inflation. Against this backdrop, the Fed held a key bank lending rate at a record low of between 0% and 0.25%, and pledged again to keep it there for "an extended period" to help brace activity going forward. More»

Fed expected to step up purchase of mortgage securities

(NEWSER) - The Federal Reserve is expected to step up its buying of mortgage securities after policymakers meet today and tomorrow, Bloomberg reports. The outlook for the economy and job market has gotten bleaker since the Federal Open Market Committee last met 6 weeks ago and analysts believe Ben Bernanke is likely to announce more aggressive action to tackle deflation and boost the Fed's balance sheet. More»

(NEWSER) - The Federal Reserve anticipates the recession will continue through 2009 despite its recent rate slash and other planned “nontraditional policies,” the Wall Street Journal reports. Minutes of the Fed's December 15-16 meeting, at which it cut rates to nearly zero, indicate a deep pessimism about the economy. Officials expect the unemployment rate to keep rising as the GDP contracts. More»