Wednesday, September 20, 2006
'Fed Trying To Engineer Soft-Landing'
The Associated Press reports on the FOMC meeting. "The Federal Reserve left a key interest rate unchanged on Wednesday as falling energy prices helped to restrain inflation pressures. Federal Reserve Chairman Ben Bernanke and his colleagues issued a brief announcement saying they would leave the federal funds rate, the interest that banks charge each other, at 5.25 percent."
"The Fed is trying to engineer a soft-landing for the economy in which growth is slowed enough to keep inflation from getting out of hand without overdoing the credit tightening and raising the chances of a recession."
"In its statement, the Fed continued to signal concerns about inflation, repeating a phrase it had used last time, that the Fed's rate setting panel 'judges that some inflation risks remain.'"
"The decision to keep rates unchanged Wednesday was supported by a 10-1 vote with Jeffrey Lacker, president of the Fed's Richmond regional bank, again casting the lone no vote. Lacker, who also dissented in August, argued again that another quarter-point rate hike was needed to keep inflation in check."
"Economists who believe the Fed is finished raising rates point to the drop in energy prices as a major factor that will help slow price pressures going forward. Also helping to lower inflation pressures has been a big slowdown in housing followin
"PIMCO, one of the world's largest bond managers, expects the U.S. economy to slow appreciably over the next 12 months, a PIMCO executive said Wednesday."
"The biggest downside risk for global growth is a sharper-than-expected slowdown in the U.S. housing market, said Paul A. McCulley, a managing director and portfolio manager at PIMCO."
"PIMCO expects the effect on growth outside the U.S. to be mild, with global inflation increasing modestly over the next 12 months, causing the European Central Bank and the Bank of Japan to continue to raise interest rates, even as the Federal Reserve stays on hold, McCulley said."
"The Fed is trying to engineer a soft-landing for the economy in which growth is slowed enough to keep inflation from getting out of hand without overdoing the credit tightening and raising the chances of a recession."
"In its statement, the Fed continued to signal concerns about inflation, repeating a phrase it had used last time, that the Fed's rate setting panel 'judges that some inflation risks remain.'"
"The decision to keep rates unchanged Wednesday was supported by a 10-1 vote with Jeffrey Lacker, president of the Fed's Richmond regional bank, again casting the lone no vote. Lacker, who also dissented in August, argued again that another quarter-point rate hike was needed to keep inflation in check."
"Economists who believe the Fed is finished raising rates point to the drop in energy prices as a major factor that will help slow price pressures going forward. Also helping to lower inflation pressures has been a big slowdown in housing followin
"PIMCO, one of the world's largest bond managers, expects the U.S. economy to slow appreciably over the next 12 months, a PIMCO executive said Wednesday."
"The biggest downside risk for global growth is a sharper-than-expected slowdown in the U.S. housing market, said Paul A. McCulley, a managing director and portfolio manager at PIMCO."
"PIMCO expects the effect on growth outside the U.S. to be mild, with global inflation increasing modestly over the next 12 months, causing the European Central Bank and the Bank of Japan to continue to raise interest rates, even as the Federal Reserve stays on hold, McCulley said."
# posted by Ben Jones @ 12:16 PM 
