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Jonnelle Marte

Fed's Harker says he opposed last rate cut, thinks rates should stay put

2:39am IST

NEW YORK Philadelphia Federal Reserve Bank President Patrick Harker said on Tuesday he did not support the Fed's last rate cut in October and that the central bank should keep policy steady.

Fed is data-dependent from here, NY Fed's Williams says

06 Nov 2019

NEW YORK New York Federal Reserve President John Williams said Wednesday any changes in interest rates from here will depend on the incoming economic data but policymakers should be preemptive in taking steps to keep the expansion alive.

After year-long bumpy ride, Fed appears to make soft landing

02 Nov 2019

HOUSTON/NEW YORK After a year-long struggle with bond markets, the Trump administration, and each other, Federal Reserve policymakers found their way to a compromise this week with a rate cut that even the White House said had put monetary policy in a much better place.

Are the Fed's rate cuts helping? Have a look

31 Oct 2019

NEW YORK/WASHINGTON Ask a Federal Reserve official if the clutch of interest rate cuts it has delivered this year are helping the economy and you will get a swift answer: Yes.

RPT-GRAPHIC-Are the Fed's rate cuts helping? Have a look

31 Oct 2019

(Repeats with no change in content) By Jonnelle Marte and Dan Burns NEW YORK/WASHINGTON, Oct 31 Ask a Federal Reserve official if the clutch of interest rate cuts it has delivered this year are helping the economy and you will get a swift answer: Yes. Fed Chair Jerome Powell said as much on Wednesday after the central bank cut borrowing costs for the third time since July, saying officials "see now more clearly the effects of more accommodative monetary policy on various kinds of consumer activity." "You are seeing strong durable goods sales. You are seeing housing now contributing to growth for the first time in a while. And you are seeing retail sales," Powell said at his news conference following the Fed's interest rate announcement. "More broadly, monetary policy is also supporting household spending and home buying by keeping the labor market strong, keeping workers incomes rising, and keeping consumer confidence at high levels." Indeed, there is evidence that Powell and his colleagues are not tooting their own horns without some justification. The housing market is showing green shoots as mortgage rates have dropped. Car loans are in greater demand, and sales of high-priced vehicles like pickup trucks are near a record. Stocks are reaching fresh highs. Consumers, fortified by a strong labor market, continue to spend. It is not all wine and roses, however, as business spending, which has been hit by the Trump administration's trade war with China, has so far not responded to the Fed's easing with the same gusto. Here is a look at the various ways the central bank's rate reductions are already showing up throughout the economy: HELP FOR HOUSING Lower mortgage rates are helping to revive activity in the U.S. housing market, which stalled last year amid rising rates and higher home prices. Home construction added to growth in the third quarter for the first time in nearly two years, the Commerce Department said on Wednesday. The pending home sales index, which is based on contracts signed in September, rose by 1.5% and is near a two-year high, according to the National Association of Realtors. Still, a shortage of homes for sale is limiting overall growth in the housing market. The homes that are for sale are now becoming more affordable because of lower mortgage rates. A home buyer earning the national median income would need to spend 20.7% of pay to make the monthly principal and interest payment on an average priced home as of the end of September when 30-year fixed rate mortgages were at 3.64%, according to an analysis by Black Knight Inc. That is down from last November, when payments ate up 23.7% of the median income and affordability reached a nine-year low. Refinancing activity is also up since August as homeowners move to lock in lower rates and reduce their monthly payments. DRIVING CAR AND TRUCK SALES Banks are reporting resurgent demand for auto loans as rates have fallen, according to the Fed's quarterly senior loan officer opinion survey. Spending on consumer durables that are sensitive to interest rates, including cars, rose by an annualized rate of 7.6% in the third quarter, according to a report from Morgan Stanley. Total sales have rebounded from a four-year low earlier this year and are back running at more than 17 million vehicles annually. Sales of pickup trucks and sport utility vehicles, which sport higher sales prices and now dominate the new-vehicle market, were just shy of a record in September. WEALTH AND EASY MONEY The S&P 500 index closed at a record high on Wednesday after the Fed announced the third rate cut. Investors are more optimistic about the economic outlook after positive developments in the prolonged trade dispute with China and the risks of a no-deal Brexit decreased. The Fed's actions to lower borrowing costs and improve liquidity in money markets could also be contributing to investor confidence. Some investors might be turning to stocks in search of higher returns at a time when bond yields are low. "If you have a need to generate some sort of meaningful return, you're going to buy stocks," said David Spika, president of GuideStone Capital Management. Since January, when Powell and the Fed signaled they had pivoted away from raising rates, conditions in key corporate credit markets have eased substantially. The yield spread for junk bonds - a measure of the added compensation investors demand for owning risky corporate debt rather than safer government bonds - has narrowed substantially. WEAK SPOTS REMAIN The big sore spot for both the Fed and the economy at large is a reluctance by U.S. businesses to spend, a hesitance Fed officials and corporate executives blame on Trump's unpredictable trade policy. In Wednesday's first reading of gross domestic product for the third quarter, the Commerce Department said business investment was a net drag on the economy for the second quarter in a row. The last time that happened was a decade ago during the Great Recession. Businesses also appear hesitant to borrow to fund investment. The Fed's latest senior loan officer survey showed softening commercial loan demand for a fourth straight quarter, and year-over-year growth in commercial and industrial loans outstanding has fallen by half in the past six months. (Reporting by Jonnelle Marte and Dan Burns; Editing by Peter Cooney)

WRAPUP 2-Fed expected to cut rates, but resilient economy may signal pause ahead

30 Oct 2019

NEW YORK/WASHINGTON, Oct 30 The Federal Reserve is expected to reduce interest rates on Wednesday, but new data showing resilient U.S. economic growth may make that rate cut the last for now.

RPT-WRAPUP 1-With balance sheet in background, markets focus on Fed's rate decision

30 Oct 2019

Oct 30 When Federal Reserve officials conclude their two-day policy meeting on Wednesday, they may at last have succeeded in divorcing the actions they take in managing the U.S. central bank's massive balance sheet from interest rate decisions.

New York Fed offers to inject more liquidity into the banking system

25 Oct 2019

The Federal Reserve Bank of New York is boosting the size of the cash injections it can make into overnight borrowing markets.

アングル:逆イールドは解消、それでも残る米景気の不安

24 Oct 2019

[ニューヨーク 22日 ロイター] - 景気後退の予兆として注目される3カ月物米財務省短期証券(Tビル)<US3MT=RR>と10年国債<US10YT=RR>の利回りの逆転(逆イールド)が、11日に解消した。投資家が景気の先行きに楽観的になったと解釈することもできるが、今回の逆イールド解消は市場のテクニカルな要因で引き起こされた面がある。このため一部の専門家は、米景気の足場が依然としてぜい弱かもしれないと警戒している。

Treasury yield curve may be back to normal but U.S. economy is not

22 Oct 2019

NEW YORK A closely watched part of the U.S. bond market that is widely viewed as a recession indicator has recently stopped flashing red. But investors and economists say the economy is still not in the clear.

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