Stories related to: Federal Reserve

Inflation worries have some Fed officials hinting that interest-rate cuts may slow down, sparking concerns among investors who expect the central bank to trim rates 75 more basis points at its March 18 meeting, reports the Wall Street Journal. Rates have been reduced 2.25% since September—to 3%--in an effort to rally the flagging economy More »

The Dow climbed 46.90 points to 12,247 in the face of bad news, ending a seesaw day up and breaking a three-day slump. Existing homes sales fell 1.5% in December, and tech bellwether Cisco reported weaker third-quarter growth than expected, but prices were low enough to stave off the bears. “There are a lot of deep discounts, and value buyers are out there,” said a trader. More »

Economists went negative on Ben Bernanke in a new Wall Street Journal survey, grading the Fed chief at 75 out of 100 points—the lowest mark in two years on the job—and saying he had managed communications poorly and was too attentive to bears and bulls. One watcher said the Fed gave “too little too late on cuts, and has been lax on supervision and regulation.” More »

Nonfarm payrolls declined 17,000 in January, the first monthly loss of US jobs since August 2003. The surprising loss—in manufacturing, construction, financials, and government—seems to vindicate aggressive action by the Fed, the Wall Street Journal reports. The number, which had been expected to climb by 75,000 jobs, raised both recession worries and hopes for yet another Fed rate cut. More »

The Federal Reserve cut a key interest rate by a half percentage point today, reports the Wall Street Journal, bringing the benchmark overnight lending rate down to 3% even as officials signaled that further cuts were possible. The widely anticipated move follows last week's emergency .75% cut to a rate that stood at 5.25% just a few months ago. More »

Economic growth braked so violently in the fourth quarter of 2007 that it wiped out a stellar third quarter, dragging annual growth to a 5-year low. Last quarter’s 0.6% GDP growth—after 4.9% pace in Q3—was just half what analysts expected, as the housing component plummeted 24%, its biggest fall since 1981. One key inflation gauge also saw a big 2.7% increase, Bloomberg reports. More »

European stocks followed declines in Asian markets as news of more subprime woes overshadowed an anticipated 50 basis point rate cut from the Federal Reserve and some positive economic data from the US, AFP reports. London’s FTSE 100 was down 0.85%, the Paris CAC was off 1.54%, Frankfort’s DAX 30 dipped 0.67% and the Euro Stoxx 50 was off 0.80%. More »

Stocks rose for a second straight session today thanks to a late rally. Flagging techs dragged down the markets initially, but then got a boost from a cheerful report on durable goods orders on the first day of the Fed meeting, reports CNNMoney. The Dow climbed 96.41 to 12,480.30, the Nasdaq 8.15 to 2,358.06, and the S&P 8.33 to 1,362.30 More »

Stocks finished in positive territory today, riding hopes that grim new housing numbers will lead the Fed to cut interest rates this week. "The main event for the week will be the Fed-rate decision on Wednesday," a strategist tells MarketWatch. The Dow was up 176.72 to 12,383.89, the Nasdaq 23.71 to 2,349.91, and the S&P 23.36 to 1,353.97. More »

The Fed’s emergency three-quarter percentage-point cut Tuesday to the short-term interest rate was a boon to US markets, but whether the Fed will go lower in its interest-rate lambada remains to be seen. Most analysts expect a half-point cut, to 3%, at the Fed's meeting Wednesday, reports the Wall Street Journal; some see the possibility of another three-quarters.  More »

Yesterday's steep interest rate cut—just a week ahead of a scheduled policy meeting—made the staid Federal Reserve come across as spooked and jumpy, leaving many to wonder if the Fed knows of worse news to come, Reuters' Ros Krasny writes. The surprise .75-point cut "is a declaration of a state of emergency for the US markets and the economy," a market strategist said. More »

Stocks declined today but ended the session up from the depths of their initial plunge, as the Fed's emergency rate cut seemed to calm freaked-out investors. "This at least gets people from piling in on the short side of things," one strategist told MarketWatch. The Dow fell 128.11 to 11,971.19, the Nasdaq 47.75 to 2,292.27, and the S&P 14.69 to 1,310.50. More »

The country needs a federal stimulus package ASAP, Federal Reserve Chairman Ben Bernanke told the House Budget Committee today, advocating immediate legislation designed “so its effects on aggregate spending are felt as much as possible within the next 12 months.” But he said the package should be “explicitly temporary,” to avoid unwanted long-term stimulus and an undue deficit bulge, CNNMoney reports. More »

Ben Bernanke insists he won’t take sides in a congressional fray over how to revive the nation’s flat-lining economy. But the Fed chief says he will support an economic stimulus package—be it GOP tax cuts or Democrats' increased spending—as long as it is quick and temporary, the New York Times reports. Lawmakers are scrambling to devise ways to ward off a recession, and Bernanke testifies before a House panel tomorrow. More »

Stocks ended slightly down today partly in response to falling oil prices, which could provide a possible jump-start for consumer spending, the Wall Street Journal reports. "Considering that oil was near $100 not too long ago, this is a big move," one trader said. The Dow ended down 34.95 to 12,466.16, the Nasdaq 23.00 to 2,394.59, and the S&P 7.75 to 1,373.20. More »

The Federal Reserve's regional business survey—released today, ahead of chief Ben Bernanke's appearance tomorrow before Congress—shows economic activity increasing more slowly, thanks to "disappointing" holiday sales. Some analysts think the survey—nicknamed the Beige Book—is evidence for a general economic slowdown, reports Bloomberg. "We are pretty much on the knife's edge'' of a recession, says one economist. More »

The Federal Reserve may make "substantive" cuts to interest rates later this month in the face of rising economic difficulties, Ben Bernanke said today. Citing troubled financial markets and rising unemployment, the Fed chairman implied that it might drop its target short-term interest rate by .5% from 4.25%. “We stand ready to take substantive additional action as needed to support growth,” Bernanke said. More »

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 »

The labor market took a hit in December, with the jobless rate hitting a two-year high and payroll increases falling well short of predictions. Nonfarm payrolls rose just 18,000, much less than both November’s 115,000 and the 50,000 prognosticators expected. The gloomy numbers increase the odds that the Fed will cut rates for the fourth straight time later this month, the Wall Street Journal reports. More »

If rent prices are any indication, home prices aren’t done falling, according to one former and two current Federal Reserve economists. Annual rents have historically held steady at about 5% of home prices, but since 1996 home prices have left rents in the dust, the Wall Street Journal explains. Housing would need to fall 15% over five years to restore order. More »