| The Federal Reserve keeps interest rates on hold at 5.25%
FXstreet.com (Barcelona) – The Federal Reserve's Monetary Policy Committee has decided to maintain interest rates unchanged at 5.25% after their monthly monetary policy meeting.The decision has been taken in a context of moderate economic growth, according to the Federal Reserve's statement, with volatile financial markets and tighter credit conditions for households and businesses. Nevertheless, according to the Fed the economy seems to be expanding at a moderate pace over the coming quarters, supported by growth on incomes and employment.The odds are now in favour of a rate cut before the end of the year pressed by the economic slowdown U.S. economy is going through, specially notorious in the housing market and mortgage sector. On the other hand, higher than desirable inflation keeps the Federal Reserve´s aim off the temptation of a too fast rate cut, although readings on core inflation seem to have entered a moderation cycle.
The Federal Reserve keeps interest rates on hold at 5.25%
FXstreet.com (Barcelona) – The Federal Reserve's Monetary Policy Committee has decided to maintain interest rates unchanged at 5.25% after their monthly monetary policy meeting.The decision has been taken in a context of moderate economic growth, according to the Federal Reserve's statement, with volatile financial markets and tighter credit conditions for households and businesses. Nevertheless, according to the Fed the economy seems to be expanding at a moderate pace over the coming quarters, supported by growth on incomes and employment.The odds are now in favour of a rate cut before the end of the year pressed by the economic slowdown U.S. economy is going through, specially notorious in the housing market and mortgage sector. On the other hand, higher than desirable inflation keeps the Federal Reserve´s aim off the temptation of a too fast rate cut, although readings on core inflation seem to have entered a moderation cycle.
Manulife Financial Corporation reports record second quarter earnings of $1.1 billion
Manulife Financial Corporation today reported record shareholders' net income of $1,102 million, an increase of 15 per cent over the second quarter of last year. Fully diluted earnings per share were $0.71, up 18 per cent from one year ago. As well, adjusted return on common shareholders' equity(1) was 18.5 per cent, an increase of 220 basis points. Second quarter premiums and deposits rose to $16 billion, an increase of five per cent over last year when considered on a constant currency basis. Growth was a result of continued strong sales and growth in recurring premiums and deposits. "The second quarter was a solid one for our Company," said Dominic D'Alessandro, President and Chief Executive Officer of Manulife Financial. "Our businesses continued to deliver strong earnings and sales growth and our return on equity hit a post-merger record.
Blame Greenspan?
WITH INVESTORS HAVING lost the odd billion in recent weeks (but remember: share prices are still 14 percent higher than they were at this time last year), the hunt for a scapegoat is on. Washington pundits are not famous for their kindness to politicians, regulators and other out-of-power figures to whom they no longer crave access. So it should come as no surprise that Alan Greenspan has been nominated as the culprit, and that the process of chipping away at the pedestal on which he stands has begun. .
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.
Bernanke faces his first big test
WASHINGTON � Turmoil in financial markets amid deepening concern about a credit squeeze is leading investors increasingly to expect the Federal Reserve to cut interest rates. But many economists question if the central bank will � and should � act. Some economists, such as Maria Fiorini Ramirez, who runs her own economic consulting firm in New York, say the Fed should cut rates to help restore confidence in a financial system quivering amid the subprime mortgage mess: "In times of crisis, you need someone to stand up and say � 'We'll do what is needed.' " .
How do I grab some of this 'excess' liquidity?
WHENEVER I hear the words "excess liquidity", I begin to worry. It usually means that I somehow end up having to pay more interest on my loans, or getting less interest for my deposits - because the economy and the banking system have trouble dealing with all that extra cash sloshing around in the system. That is apparently why the Reserve Bank of India stepped in a couple of days ago and hiked the amount of cash banks will have to keep locked up with it. The banking regulator doesn't want too many rupees being injected into the economy at this point of time, which will have the potential of pushing the inflation rate up. Good on them, I say. As a consumer, I am all for moderate inflation rates. Especially since the private sector has long buried the concept of an inflation index-linked 'dearness allowance', which was supposed to automatically prevent your real disposable income from eroding.
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