The U.S. Federal Reserve most likely still at least a few months will not move interest rates. However, she must be prepared to withdraw from programs to promote financial sector. Good start to the extended maturity of assets linked to mortgage debt.
Yesterday the Federal Open Market Committee (FOMC) of the American Federal Reserve Bank left interest rates at historically low levels 0-0,25 percent. The market expected. Was less certainty about the decision on the fate of the redemption of the assets related to mortgage debt, worth 1.45 trillion. Ultimately, the Fed announced that it will by the end of this year all the funds allocated for this program. Do so by the end of the first quarter of 2010 - will gradually reduce the pace of buying up assets in order to allow the market to operate in this area on their own - the FOMC made it clear in a statement. The representatives also informed the Committee that recognize the signs of growth in economic activity, which has helped revive the financial markets. - Household spending remains constrained, however, are often job loss, declining wealth and the tight credit situation - highlighted. Anticipation of improving Fed keeps rates at close to zero since December last year. Thus a significant easing of monetary policy was used when pulling the country out of recession. But now, when there are signs of economic recovery, economists are increasingly wondering when the rate will be increased. Yesterday once again the FOMC announced that rates will remain at current levels "for a longer period." As long as the risk of a return to high inflation is , the Fed will have little incentives that encourage them to strengthen monetary policy. Improving the economic situation, however, it can be gradually deprived of the motivation to keep rates at current levels. Argument for them would alter and probably for some time the slow pace of economic recovery. Problem for the Fed will also withdraw from the anti-crisis program. Some of the economists fear that the large expenditures associated with these programs can accelerate the pace of inflation and lead to a large increase in Treasury bond yields. The economy is not beating, but the recovery is still at a very early stage.
There is therefore now necessary to increase the value of these programs, but it is still too early to reduce it - shows Mark Gertler, an economist at New York University. The Fed will gradually and carefully limited in the next year the size of these programs with the introduction of further signs of economic recovery - said Maury Harris, an analyst with UBS Securities. The U.S. Federal deposit insurance agency (FDIC) has problems and intends to turn to banks for financial support it from them so many billions of dollars, in order to improve its precarious condition. Another option under consideration by the FDIC would have to impose special fees on lenders. The Agency may also request the assistance of the Treasury Department. Such support would further burden the state budget to emergency centers. Here there is no good solution. Discussion is about which of these options is the least evil - said Jaret Seiberg, an analyst with research firm Concept Capital.FDIC insures bank deposits totaling 6.2 trillion. In June, the agency funds earmarked for this purpose amounted to only 10.4 billion dollars. Caused by the crisis caused a wave of bank failures so that it has decreased to the level of 1992.
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