Posts Tagged interest rate
Low Rates Needed for ‘Some Time’
Posted by Tetyana Matychak in Banks on March 9th, 2010
Federal Reserve Bank of Chicago President Charles Evans said low interest rates are likely to be needed “for some time” as high unemployment lingers and inflation stays below his goal.
“With the unemployment rate at 9.7 percent and inflation significantly under my benchmark for price stability, there is no conflict between our policy goals,” Evans said in the text of a speech in Arlington, Virginia. Weakness in the job market, including long-term unemployment, means that “This accommodation will likely be appropriate for some time.”
Fed Chairman Ben S. Bernanke said last month the U.S. economy is in a “nascent” recovery that still requires low interest rates to encourage demand by consumers and businesses once federal stimulus fades. At the same time, policy makers are winding down emergency programs and laying plans for an eventual reduction of the Fed’s balance sheet to prevent an increase in inflation as the economy recovers.
The U.S. unemployment rate held at 9.7 percent in February and payrolls dropped 36,000, less than forecast, a sign that the labor market may be stabilizing after a recession that has eliminated 8.4 million jobs. The economy expanded at a 5.9 percent annual pace in the fourth quarter, the fastest rate in six years, the Commerce Department reported last month. Read the rest of this entry »
How to Fix Your Finances in 2010
Posted by Tetyana Matychak in Budget on March 4th, 2010
Still mulling over your New Year’s financial resolutions? - David Laibson, a Harvard University economics professor, has one for you—one that many of us may wish we’d made last year.
“Promise that you’ll never try to time the market again,” he suggests, a not-too-subtle gibe at the many investors who sold their stock in the depths of the downturn early this year and then missed the huge rally that followed.
That’s not the only thing many of us could afford to improve. We would also like to save more, earn more and spend more wisely in 2010. But despite the fresh promise of a new year and a new decade, tackling all our goals at once can be overwhelming.
So to help you accomplish your many New Year’s ambitions, here’s a year’s worth of personal-finance aspirations, timed to major holidays to raise your chances of success: Read the rest of this entry »
Credit-Card Fees: the New Traps
Posted by Tetyana Matychak in Budget, Favourites on February 26th, 2010
A new federal credit-card law that takes effect Monday could erase billions of dollars a year in fees and interest charges paid by consumers. But card issuers are already deploying new tactics that could prove costly for even the most cautious cardholder.
The law made some important changes. Card companies must now tell customers how long it would take to pay off the balance if they only make the minimum monthly payment. Customers can only exceed their credit limit if they agree ahead of time to pay a penalty fee. And unless a cardholder misses payments for more than 60 days, interest-rate increases will affect only new purchases, not existing balances.
Banning these and other profitable tactics is expected to cost the card industry at least $12 billion a year in lost revenue, according to law firm Morrison & Foerster. This has sent the industry scrambling to find new sources of revenue. So get ready for higher annual fees, higher balance-transfer charges, and growing charges for overseas transactions.
“There are countless fees that can be introduced and rates can go through the roof,” says Curtis Arnold, founder of U.S. Citizens for Fair Credit Card Terms Inc., a consumer-advocacy group.
Consider the new offer from Citigroup Inc. The bank will give cardholders a credit of 10% on their total interest charge if they pay on time. That sounds enticing, except that if you don’t pay on time, your interest rate is 29%. Read the rest of this entry »
Unemployment Rate Holds At 10%
Posted by Tetyana Matychak in Budget on February 5th, 2010
The Labor Department released it’s December job’s report on Friday which saw job losses climb once again, after revisions showed a slight gain of 4,000 jobs from November. While the unemployment rate remained at 10%, that figure is a little misleading because it doesn’t factor in the growing number of people that have stopped looking for work.
Nonfarm payroll employment edged down (-85,000) in December, and the unemployment rate was unchanged at 10.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction, manufacturing, and wholesale trade, while temporary help services and health care added jobs.
While the pace of job losses has definitely slowed over the past few months, many economists still expect a weak labor market for years to come. The unemployment rate has doubled from 5% and over 7 million jobs have been lost since December 2007.
That being said many forecasts expect the economy to grow around 3% this year but the main reason will be that there is still a lot of government stimulus that is working it’s way through the system. But while inflation is not a problem for the moment, it is something the central bank will have to deal with eventually. Read the rest of this entry »
Fed holds rates at record low to aid recovery
Posted by Tetyana Matychak in Budget on February 2nd, 2010
The Federal Reserve pledged Wednesday to hold rates at record lows to nurture the economic recovery and lower unemployment. But its decision drew a dissent from one member, signaling the Fed’s challenge in deciding when to pull back stimulus money it pumped into the economy.
The Fed’s statement sketched a mixed picture of the economy. Pointing to weakness, it noted that bank lending is contracting. And it dropped a reference in its previous statement to an improving housing market.
But on the positive side, the Fed said business spending on equipment and software seems to be rising. And it said economic activity”continues to strengthen.”
The Fed said it still expects to end a $1.25 trillion program aimed at driving down mortgage rates as scheduled on March 31. Yet it reiterated that it remains open to changing that timetable if necessary.
Reports on home sales this week pointed to a still-fragile housing market. Read the rest of this entry »
Steps you can take to build credit, get a card
Posted by Tetyana Matychak in Banks, Favourites on January 19th, 2010
Gone are the days when credit card companies barraged you like a lovestruck suitor. Today, bruised by economic losses and consumer defaults, many credit card companies are spurning the customers they once wooed.
And if you’ve got a dinged-up credit score or no credit history, getting a new credit card is next to impossible.
We know one young man – a recent college graduate with a decent-paying job and no major credit dings – who’s been turned down for a credit card repeatedly, even from department stores like Macy’s.
“Credit is still tight, so issuers are not approving as many people with no credit or bad credit as they did 18 months ago when the economy was good,” said Bill Hardekopf, founder of LowCards.com. “It is a very big challenge for them.”
Those with bad credit have long had trouble getting credit cards or finding cards with affordable interest rates. Read the rest of this entry »
New and improved mortgage forms
Posted by Tetyana Matychak in Banks on January 7th, 2010
Starting Jan. 1, new rules go into effect that simplify and clarify exactly what mortgage lenders will charge for a loan.
The initiative from the Department of Housing and Urban Development (HUD)requires that a new “Good Faith Estimate” form be given to all applicants, one that makes it easier to compare true costs of loans from different lenders.
“The main purpose is to give consumers the tools to be able to compare apples to apples,” said Robert Grosser of Luxury Mortgage, a New Jersey-based direct lender. “All lenders must use a specific form and disclose fees in the same spots on the same forms.” (See the new form.)
Until now, borrowers might have focused on interest rates or monthly payments to compare mortgages options. But fees play a big part in total cost, said Vicki Bott, HUD’s Deputy Assistant Secretary for Single Family Programs.
There are generally two blocs of fees. Read the rest of this entry »
Surprise! The Fed says don’t blame the Fed
Posted by Tetyana Matychak in Budget on January 4th, 2010
The Pope is considered to be infallible. Apparently, those who hold the title of Federal Reserve chairman want to be viewed that way as well.
Fed chair Ben Bernanke defends the decision by his predecessor Alan Greenspan to keep interest rates super low following the 2001 recession, saying that the Fed’s monetary policies were not the cause of the housing bubble.
In a speech Sunday, Bernanke said that it was the availability of exotic loans that allowed people who really couldn’t afford a home to get a mortgage that was the culprit, not the fact that rates were at then-historic lows.
By absolving the Maestro of any blame for the credit binge that led to the Great Recession, Bernanke also appears to be sending a strong message to Fed critics and the financial markets as well.
Rates, which have been stuck near zero since December 2008, are likely to stay there for some time — and Bernanke may be suggesting that this won’t lead to a repeat of last decade’s sins. Read the rest of this entry »
US Dollar Likely to Continue Upward Swing This Week
Posted by Tetyana Matychak in Currency on December 21st, 2009
The dollar is likely to extend gains in the upcoming week, continuing to draw support from growing signs of a stable U.S. recovery as well as a Federal Reserve plan to wind down most of its emergency lending early next year.
Both factors have pushed the market’s U.S. interest rate expectations forward despite pronouncements from the Fed that it will keep interest rates low for an extended period.
The rate futures market Friday has priced in at least one quarter-point rate increase by the beginning of the second half next year. A few months ago, futures traders had factored in Fed tightening late in 2010.
“We see the U.S. economy continuing to recover and monetary policy settings starting to move back to normal,” said Nick Bennenbroek, head of FX strategy at Wells Fargo in New York.
“Although our economics team does not expect actual rate tightening to take place until late in 2010, the withdrawal of non-conventional measures could start tipping the scales in the dollar’s favor,” he added. Read the rest of this entry »
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Credit-Card Fees: the New Traps
26 February 2010
Credit regulations aim to help students
23 February 2010
The worst is yet to come
17 February 2010
Afflictions of liberty
8 February 2010
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