| Fed keeps key interest rate steady
Wall Street turbulence, Main Street credit problems and a nationwide housing slump pose increasing risks to the economy, the Federal Reserve said Tuesday, even as it left interest rates unchanged. Although Federal Reserve Chairman Ben Bernanke and his central bank colleagues acknowledged challenges that have intensified since their last meeting in late June, they nonetheless expressed hope that the economy will safely make its way. The policymakers also stood by their belief that the biggest potential danger to the economy is that inflation won't recede as they anticipate. Against these economic crosscurrents, the Fed left an important interest rate at 5.25 percent on Tuesday. In turn, commercial banks' prime interest rate for certain credit cards, home equity lines of credit and other loans -- would stay at 8.25 percent.
Federal Reserve finds banks tightening standards on subprime mortgages
WASHINGTON (AP) - A majority of the nation's banks have tightened lending standards on subprime mortgages, the Federal Reserve said Monday in a survey that provided further evidence of the spreading problems in mortgage lending. The Fed said it found that 56.3 percent of banks responding to a survey reported that they had tightened their lending standards for subprime mortgages, loans offered to borrowers with weak credit histories. The survey found that 40.5 percent of banks responding said they had tightened loan standards for so-called nontraditional mortgages. The Fed defines this category as adjustable-rate loans with multiple payment options, interest-only mortgages and products referred to as "Alt-A" loans that offer such features as limited verification of incomes.
Fed leaves interest rate unchanged
WASHINGTON: The Federal Reserve on Tuesday left a key interest rate unchanged as worries about inflation trumped concerns over turbulent financial markets. Fed chairman Ben Bernanke and his colleagues voted unanimously to keep their target for the federal funds rate � the interest that banks charge each other � at 5.25%, where it has been for more than a year. The Fed decision came after a volatile couple of weeks on Wall Street as investors have been beset by troubles in global credit markets stemming from a sharp rise in defaults on subprime mortgages. In a brief statement, the Fed acknowledged the turbulence and said the downside risks to the economy had �increased somewhat''. But the Fed continued to state that the predominant risk remained that inflation �will fail to moderate as expected''. Mark Zandi, chief economist at Economy.com, said Fed officials were �signalling that events in financial markets are of concern ...
Fed Leaves Key Interest Rate Unchanged
The Federal Reserve left a key interest rate unchanged on Tuesday as worries about inflation trumped concerns about turbulent financial markets. Fed Chairman Ben Bernanke and his colleagues voted unanimously to keep their target for the federal funds rate _ the interest that banks charge each other _ at 5.25 percent, where it has been for more than a year. The Fed decision came after a volatile couple of weeks on Wall Street as investors have been beset by troubles in global credit markets stemming from a sharp rise in defaults on subprime mortgages. In a brief statement, the Fed acknowledged the turbulence and said the downside risks to the economy had "increased somewhat." But the Fed continued to state that the predominant risk remained that inflation "will fail to moderate as expected." Many analysts believe the Fed will remain on hold through the rest of this year, preferring to watch and make sure that inflation moderates back to an acceptable level.
Fed leaves key interest rate unchanged
The Federal Reserve left a key interest rate unchanged on Tuesday as worries about inflation trumped concerns about turbulent financial markets. Fed Chairman Ben Bernanke and his colleagues voted unanimously to keep their target for the federal funds rate, the interest that banks charge each other, at 5.25 percent, where it has been for more than a year. The Fed decision came after a volatile couple of weeks on Wall Street as investors have been beset by troubles in global credit markets stemming from a sharp rise in defaults on subprime mortgages. In a brief statement, the Fed acknowledged the turbulence and said the downside risks to the economy had "increased somewhat." But the Fed continued to state that the predominant risk remained that inflation "will fail to moderate as expected." Many analysts believe the Fed will remain on hold through the rest of this year, preferring to watch and make sure that inflation moderates back to an acceptable level.
Howard 'irresponsible' on interest rates
The Federal Opposition is looking to capitalise on predictions of another interest rate rise, after the Reserve Bank of Australia (RBA) said a strong Australian economy continues to put pressure on inflation. A forecast hike in underlying inflation has economists predicting another rate rise. Australians for Affordable Housing spokesman David Imber says the impact would be enormous. "That would be dreadful news," he said. Opposition treasury spokesman Wayne Swan is making the most of it. "It is just yet more evidence of just how irresponsible [Prime Minister] John Howard was when he promised to keep interest rates at record lows," he said. But while Labor's plan to give tax breaks to investors who build cheap rental accommodation is being welcomed by the industry, it is being condemned by federal Treasurer Peter Costello.
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