Inflation Softened in July

Fed should ignore critics, hold its ground until markets rebound

(NEWSER) - Critics claim the Federal Reserve has been too eager to cut interest rates, and that lax policy has exacerbated inflation. But the Fed should hold its ground, Desmond Lachman argues in the American, until the housing and credit markets are clearly on the rebound. The credit crunch has prompted banks to compensate with higher spreads and tighter lending standards, which should offset inflationary concerns. More»

Confidence is falling as inflation rises

(NEWSER) - Consumer spending rose more than expected in January—but only because prices did so as well, Bloomberg reports. Adjusted for inflation, spending remained flat for the second straight month. With fuel costs rising, banks restricting loans, and property values falling, “consumers are clearly hard-pressed to maintain their standard of living and are cutting back,” says an analyst. More»

Says central bank 'will act as needed' to further minimize economic risks

(NEWSER) - Federal Reserve Chairman Ben Bernanke today said that the board stands ready to cut interest rates again to give the economy "adequate insurance against downside risks," reports the Wall Street Journal. The move, which follows 2.25% in cuts to the key rate since September, is widely expected at the Fed's March 18 meeting. More»

Wall Street's top firm sees two unhappy quarters ahead

(NEWSER) - Goldman Sachs is predicting that the economy will slide into a recession this year—which has Wall Street worried, because Goldman’s been right about everything else. The investment firm forecasts a mild pullback extending over two quarters, driving up already-growing unemployment. “If we don't get job growth we don't get income growth, we don't get consumer spending, and we do get a recession,” another firm’s economist told NPR. More»

(NEWSER) - November’s retail sales confounded doomsayers, surging 1.2%, twice the 0.6% analysts predicted, Bloomberg reports. Many had worried that consumer spending would take a hit as gas rose and housing fell, but now it looks like job and income growth could cushion the fall. “The numbers should help put to rest some of the fears of sliding into recession,” said one economist. More»