Thursday August 10, 2006

Fed calls a halt to US rate rises

news.independent.co.uk, channelnewsasia.com :

The Federal Reserve called a halt to more than two years of relentless interest rate rises, signalling that the US economy was slowing sufficiently to allow a pause in its battle against inflation. The Fed kept rates on hold at 5.25 per cent after 17 consecutive quarter-point increases. It marked the first time since June 2004 that the Fed has not raised the federal funds rate. The bank had brought the rate up from a 46-year low of 1.0 percent, which was put in place to guard against the threat of recession-induced deflation.

Its decision came after a slew of economic data which showed the US economy slowing more sharply than predicted and as Wall Street and the business community began to fret that the Fed may already have tightened monetary policy too far. But the decision was complicated because inflation has remained stubbornly high. The jump in oil prices, which has pushed up petrol prices and caused consumers to rein in their spending, has also contributed to rising prices across the economy.

The clincher appeared to be last month's GDP figures for the second quarter of the year, which showed the US economy growing at 2.5 per cent - much weaker than expected and a sharp drop from the 5.6% GDP growth in the early part of the year. The Fed said economic growth had moderated because of a cooling housing market, high energy prices and the cumulative effects of its long series of rate rises since June 2004.

(2006-08-10 13:52:33 SGT) [Biz] Permalink

Most popular blog postings on lowem.log :

1. Singapore MRT rail network length to double by 2020
2. 2010 Nissan Leaf electric car specifications : 107hp, 24KWh lithium-ion batteries, 100-mile range
3. Live spot gold price quotes chart on COMEX
4. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
5. AVG Anti-Virus Free Edition 2011 direct download link
6. Real-time live gold and silver price quotes chart on COMEX
7. Singapore electric vehicles : Government agencies EMA and LTA to study EV introduction
8. Book review : Shut Down by William Flynn

Featured articles on lowem.log :

1. Book review : Shut Down by William Flynn
2. Singapore electric cars testing starts with 9 electric vehicles
3. Honda, GS Yuasa JV to make lithium-ion batteries for 2010/2011 Honda Civic Hybrid
4. 2010 Honda Civic Hybrid preliminary specifications released
5. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
6. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
7. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
8. Singapore : Nuclear power not ruled out