Fed: Recession Ending, Rates Left Alone

The Federal Reserve ended its policy-making meeting Wednesday with the declaration that the recession is ending and it would move toward more normal policies.

The Fed said, “Economic activity is leveling out.” It added that it expected inflation would remain “subdued for some time.”

The Fed said it will keep the short-term key interest rate near zero, but it will end its program to buy $300 billion worth of Treasury bonds by the end of October. Buying bonds was one of the Fed’s efforts to drive down the cost of home mortgages.

“In a way, it’s more of a thumbs-up than if they had said they were continuing the Treasury-buying,” said Edward McKelvey, an economist at Goldman Sachs. “They’re saying that things are going according to plan, and that the policy is O.K.”

Source: The New York Times, Edmund L. Andrews (08/12/2009)

Real Estate Markets are Uncertain Today

Stocks are jumping all over the place. Bear Stear is being bought out by JPMorgan. Investors are concerned.

the dollar is sinking against the euro, oil plunged, the Nikkei stock average fell.

when will this stop???

Are we headed for a Recession?

by Nancy Woodward

Consumer spending accounts for two thirds of the economic activity in the nation. Last year, payrolls grew by 189,000 a month. this year the number is closer to 125,000.

Spending power is definitely eroding. This is caused in part by rising energy costs. Since tigher lending practices now pervail, homeowners will be less able to drain the equity in their home and increase their spending power.

You should consider your entire financial position prior to seeking additional funding. Should inflation continue to rise, it is possible we will see a recession.

As usual, I recommend you do your due dilligence prior to making significant changes to your financial situation.