Gloomy housing data precedes Fed's home loans decision
The day before the US Federal Reserve is due to announce its decision on interest rates, figures released on Tuesday by the Conference Board reported that US consumer confidence has fallen to its lowest level in 16 years.
The index slipped to 50.4 in June, down from 57.3 in May and lower than the 56.5 predicted by economists. This was the sixth consecutive monthly fall in consumer confidence and is the result of a combination of factors including the ongoing housing slump, rising unemployment and soaring energy prices.
The crisis in the housing market is seen by many as being at the heart of the US economic problems and so news that the S & P index recorded a standout 15% decline in the prices of homes in 20 of the largest US cities during April, will only add to the shadow hanging over the US economy.
Former Fed Chairman Alan Greenspan argued in a speech yesterday that the US is still on the brink of a recession but that the actions taken by his successor in the first quarter of 2008 had reduced the risk of a âsevere recession".
Whilst the market expects the Fed's current chairman Ben Bernanke to keep rates on hold today, his apparent support for a rate hike in August or September in order to contain inflation and strengthen the dollar, could be brought into question if further evidence emerges that the US is in the grips of a severe slowdown in growth.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
The index slipped to 50.4 in June, down from 57.3 in May and lower than the 56.5 predicted by economists. This was the sixth consecutive monthly fall in consumer confidence and is the result of a combination of factors including the ongoing housing slump, rising unemployment and soaring energy prices.
The crisis in the housing market is seen by many as being at the heart of the US economic problems and so news that the S & P index recorded a standout 15% decline in the prices of homes in 20 of the largest US cities during April, will only add to the shadow hanging over the US economy.
Former Fed Chairman Alan Greenspan argued in a speech yesterday that the US is still on the brink of a recession but that the actions taken by his successor in the first quarter of 2008 had reduced the risk of a âsevere recession".
Whilst the market expects the Fed's current chairman Ben Bernanke to keep rates on hold today, his apparent support for a rate hike in August or September in order to contain inflation and strengthen the dollar, could be brought into question if further evidence emerges that the US is in the grips of a severe slowdown in growth.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Labels: Bernanke, FED, home loans, interest rates, mortgage calculator
posted by Wise Money @ 7:34 AM
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