Federal Reserve

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'No Immediate Plans' to Prop Up Freddie/Fannie: Paulson

Bernanke gives gloomy outlook for rest of 2008, but raises growth forecast

(Newser) - The US government won't be lending capital to Fannie Mae and Freddie Mac in the near future, Treasury Secretary Henry Paulson told a Senate committee today. "There are no immediate plans to access either the proposed liquidity or the proposed capital backstop,'' Paulson said, and any lending to...

Paulson's Imprimateur on Freddie/Fannie Rescue

Madcap weekend recasts Treasury Secretary in Clintonian mold

(Newser) - Henry Paulson had a very busy weekend. The treasury secretary had been formulating contingency plans for bailing out beleaguered Fannie Mae and Freddie Mac for weeks, but Friday’s crisis came before those plans were in place, the Wall Street Journal reports in a reconstruction of events leading to the...

As Speculation Swirls, Panic Stalks Freddie, Fannie

As mortgage giants face increased losses, investors uncertain of their futures

(Newser) - What started as a whisper Monday is a roar at week’s end as investors wrestle with the fate of mortgage giants Fannie Mae and Freddie Mac, the Wall Street Journal reports. While neither firm, which together own or back roughly half  the nation’s mortgages, faces imminent collapse, awareness...

Fed to Crack Down on Subprime Loans

Also plans to extend low-cost overnight loan program for banks

(Newser) - The Federal Reserve will issue new rules next week restricting subprime lending and other exotic loans aimed at borrowers with weak credit, Ben Bernanke said today. He said the Fed is also considering extending the overnight low-cost loan program, which helps big banks in need of quick cash, a sign...

Baffled Execs Say Rumor Killed Stearns
 Baffled Execs Say
 Rumor Killed
 Stearns 
glossies

Baffled Execs Say Rumor Killed Stearns

They claim hedge funds, Goldman Sachs invented bad news for profit

(Newser) - Bear Stearns' collapse and shotgun marriage to JP Morgan were sparked by little more than a rumor, Vanity Fair reports. True, the investment bank had stumbled—a $1.6 billion bailout of troubled funds hurt its image—but whispers of liquidity problems were false: Bear had $18 billion in cash...

Fed Feared 'Contagion' If Bear Failed

Bernanke and crew felt they had to act, minutes show

(Newser) - If the Fed hadn't taken the unprecedented step of helping bail out Bear Stearns, a sweeping "contagion" would have doomed the markets, its members say. In newly released minutes from its March 16 meeting, the Fed reasons that the “prominent position of Bear Stearns” left it no choice...

'Difficult' Dow Ends Down 358
 'Difficult' Dow Ends Down 358 
MARKETS

'Difficult' Dow Ends Down 358

Oil surges past $140 as dollar weakens, financials downgraded

(Newser) - Stocks plunged today due to the convergence of bad news across all sectors of industry against the backdrop of oil’s first surge over $140 a barrel, the Wall Street Journal reports. The Dow plummeted to a 2-year-low, shedding 358.41 to 11,453.42. The Nasdaq fell 79.89,...

Big Rally Ends in Modest Gains
 Big Rally Ends in Modest Gains  
MARKETS

Big Rally Ends in Modest Gains

Oil drop, Fed's confidence in growth not enough to preserve rise

(Newser) - The markets rallied for much of the day on news of ebbing oil prices and the Fed's decision to hold rates steady, but it fell mostly flat by the finish on nagging worries about long-term growth, the Wall Street Journal reports. The Dow—at one point up more than 100...

As Expected, Fed Holds Steady

Federal funds rate stays at 2% as bank ends 10-month run of cuts

(Newser) - The Federal Reserve decided today leave a key interest rate unchanged, bringing an end to a string of consecutive rate cuts aimed at keeping the country out of a deep recession. The federal funds rate will remain at 2%—the first time in 10 months the Fed has failed to...

Fed Likely to Hold Rates&mdash; for Now
Fed Likely to Hold Rates—
for Now

Fed Likely to Hold Rates— for Now

Bernanke hopes the 2% interbank rate will help economy rebound

(Newser) - Despite fears that inflationary forces are revving, the Federal Reserve will probably hold the interbank federal funds rate at 2% today, hoping the bargain basement rate can help kick-start a stalled economy that’s been hamstrung by a tenacious housing slump and a credit crunch hangover, Reuters reports.

Stocks Dip as Fed Meets
 Stocks Dip as Fed Meets  
MARKETS

Stocks Dip as Fed Meets

Fed inaction spurs recovery from bad economic news

(Newser) - The markets seesawed throughout today's session, closing down slightly as a minor rally in financials offset bad economic news and warnings of a poor quarter for UPS, MarketWatch reports. The Dow fell 34.93 to 11,807.43, Nasdaq dropped 17.46 to 2,368.28, and the S&P...

Housing Slump Won't Ease Anytime Soon, Says Study

Tight credit, interest rate worries keep homebuyers on sidelines

(Newser) - Rising mortgage rates and a tenacious slump in sales and home values will continue to depress the worst housing market in decades, reports Reuters. Don't expect potential saviors—new home buyers—to make a dent any time soon, says a Harvard study. With mortgage rates at a 9-month high, credit...

Paulson Seeks Expanded Fed Powers

Treasury secretary says Fed role needs to be revised, upgraded to respond to risk

(Newser) - Treasury Secretary Henry Paulson today will urge Congress to broaden the Federal Reserve’s oversight role on Wall Street, giving it the authority to demand data from financial institutions to help prevent incidents like the Bear Stearns collapse. Any major change in regulatory authority would have to be approved by...

In Turmoil, Bernanke Forged New Persona
 In Turmoil,
 Bernanke Forged
 New Persona 
ANALYSIS

In Turmoil, Bernanke Forged New Persona

Fed chief sheds academic image with crisis management; some worry he went too far

(Newser) - Federal Reserve chief Ben Bernanke’s aggressive actions in March to douse the fire consuming financial markets won him fans on Wall Street and elsewhere, but created a cadre of critics who say the “Bernanke Doctrine” fuels inflation and hurts the dollar, the New York Times reports. “It...

Oil, Fed Leave No Grins, Just Bears
 Oil, Fed Leave
 No Grins,
 Just Bears 
MARKETS

Oil, Fed Leave No Grins, Just Bears

Fed minutes confirm expectations of higer inflation, slower growth

(Newser) - Oil prices kept on pummeling the markets today, and minutes from the Fed's most recent meeting confirmed warnings of higher inflation and lower growth—signaling a pause in rate cuts. "The rise in energy products is going to be the knell for consumer spending," one analyst tells the...

Recession Fears Overblown: Economists

Fed's actions key strong economic reports, signs of market recovery

(Newser) - A growing number of economists are saying, cautiously, that the US might have pulled back from the brink of recession, the Wall Street Journal reports. The experts credit swift action by the Federal Reserve to lower interest rates and save Bear Stearns in March, and even the ongoing distribution of...

Treasury Boss: Worst Is Over
 Treasury Boss: Worst Is Over 

Treasury Boss: Worst Is Over

Paulson says US emerging from storm

(Newser) - The US is emerging from the credit woes triggered by the turmoil over subprime mortgages—despite the continuing wave of foreclosures across the nation, according to Treasury Secretary Henry Paulson. Paulson, in the most positive comments yet from the White House on the nation's economic troubles, in part credited the...

US Must Stop Foreclosures, Bernanke Warns

He warns of cascading crisis

(Newser) - Federal Reserve Chairman Ben Bernanke yesterday called for government intervention to halt home foreclosures, warning that to do nothing could "destabilize communities, reduce property values of nearby homes, and lower tax revenues." Bernanke said in a speech in New York that a million Americans were already three months...

Jobs Rally Fizzles; Stocks Mixed
 Jobs Rally Fizzles; Stocks Mixed 
MARKETS

Jobs Rally Fizzles; Stocks Mixed

Cautious market not fully inspired by jobs, Fed action

(Newser) - The markets ended mixed today as a rally spurred by news of fewer April job losses than expected and the Fed's bank-liquidity expansion died down before the closing bell, MarketWatch reports. The Dow rose 48.20, closing at 13,058.20, and the S&P 500 gained 4.56 to...

Stocks Rally; Dow Up Almost 200
 Stocks Rally; Dow Up Almost 200 
MARKETS

Stocks Rally; Dow Up Almost 200

Fed's latest actions draw late but rave reviews

(Newser) - Stocks rallied today on strong performances by several big tech firms, MarketWatch reports. Investors also poured money into financials in anticipation of the dollar boost the Fed will cause by holding interest rates steady after yesterday’s cut. The Dow climbed 189.87 to at 13,010.00, the Nasdaq...

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