Home
Global Supplier Directory
APPLIANCE Engineer
Supplier Solutions
APPLIANCE Line
Whitepaper Library
Calendar of Events
Association Locator
Contents Pages
Market Research
Subscription Center


 
Daily News

U.S. Federal Reserve Raises Interest Rates Again
Aug 10, 2004
 Printable format
 Email this Article
 Search

The U.S. Federal Reserve has raised interest rates for the second time this year, acting to prevent the economy from growing too rapidly despite recent evidence of a slowdown.

The central bank raised the overnight federal funds rate a quarter-point to 1.5 percent, slightly increasing borrowing costs for many businesses and consumers. The move, which had been widely anticipated, came despite a startling report that the economy created just 32,000 jobs in July, far short of the 220,000 or so that forecasters were expecting. It was the second straight month of weak job growth and raised the possibility that what Fed Chairman Alan Greenspan has described as an economic "soft spot" is lasting longer than anticipated.

Because the employment report came out so soon before meeting of Mr. Greenspan and fellow policy-makers, the Fed had little choice but to follow through on its previously stated plan to continue with a "measured" series of rate hikes, analysts said. Anything else could have by given financial markets the impression the Fed was worried about the possibility of a further slowdown.

Financial market participants were convinced that the Fed planned to raise rates and felt a failure to act would raise "a credibility issue" for the central bank and potentially cause "substantial" damage to the economy by causing a sell-off in the stock market, said Lynn Reaser, chief economist for Banc of America Capital Management.

Despite the weak employment figures, most analysts believe the economy is in relatively good shape based on a range of other indicators, including rising business and consumer confidence and early evidence of stronger retail sales in July.

But some analysts believe the Fed may choose to leave rates unchanged at the next scheduled meeting of policy-makers Sept. 21, especially if the August employment report is weak. That likely would leave rates unchanged until after the presidential election because the Fed's policy-making Open Market Committee is not scheduled to meet again until Nov. 10.

The Fed lowered rates 13 times from January 2001 through June 2003, bringing the benchmark overnight rate to its lowest level in 46 years in an effort to stimulate the economy after the end of the nation's longest postwar expansion. Some analysts say the tremendously low rates are no longer needed, especially now that the threat of deflation appears to have passed, and with it a dangerous the risk to the stability of the banking system. (MSNBC.com)

Back to Daily News

 

Daily News

...........................................................

Jul 29, 2014: Jarden Reports Record Net Sales in 2Q

Jul 29, 2014: LG USA Names VanderWaal to Head Marketing

Jul 29, 2014: Smart Meters May Provide An Entrance Point for Cyber Attacks on the Connected Home

Jul 29, 2014: TCL Will Manufacture Portable HVAC Equipment for Soleus Air

Jul 29, 2014: HVACR Contractors Outlook Remains Positive

More Daily News>>

RSS Feeds
.........................................................
Appliance Industry
Market Research

...........................................................

March 2014: Market Research - 62nd Annual U.S. Appliance Industry Forecast
February 2014: Appliance Magazine Market Insight: December 2013
January 2014: Market Research - Appliance Historical Statistical Review: 1954-2012
January 2014: Appliance Magazine Market Insight: November 2013




 
Contact Us | About Us | Subscriptions | Advertising | Home
UBM Canon © 2014  

Please visit these other UBM Canon sites

UBM Canon Corporate | Design News | Test & Measurement World | Packaging Digest | EDN | Qmed | Pharmalive | Plastics Today | Powder Bulk Solids | Canon Trade Shows