US - Fed to maintain record stimulus after ending bond purchases
Federal Reserve officials decided to keep the central bank’s balance sheet at a record to spur the slowing economy after completing USD600bn of bond purchases this month. “The economic recovery appears to be proceeding at a moderate pace, though somewhat more slowly than the committee had expected,” Fed Chairman Ben S. Bernanke said yesterday. Bernanke and his colleagues on the panel cut their growth forecasts for this year and next and raised their estimates for the unemployment rate, driving stocks lower. (Bloomberg)
US - Bernanke sees small impact on US banks of a Greek default
Federal Reserve Chairman Ben S. Bernanke said a default by Greece would have little impact on US banks, which aren’t “significantly exposed” to European nations struggling to meet debt payments. “We have asked the banks to essentially do stress tests and ask, looking at all their positions, all their hedges, what would the effect on their capital be if Greece defaulted,” Bernanke said to reporters yesterday. “The answer is that the effects are very small.” Bernanke and Fed Governor Daniel Tarullo have led sweeping changes in the central bank’s approach to supervision, establishing the Large Institution Supervision Coordinating Committee. Bernanke said the Fed has also kept “a close eye” on money-market mutual funds, which hold dollar liabilities issued by European banks to fund their holdings of dollar assets. (Bloomberg)
EU - Greece vote turns spotlight back on German-ECB 'Cage Match'
The Greek Parliament’s vote of confidence in Prime Minister George Papandreou shifts the spotlight back to Germany and the European Central Bank as key to Greece’s quest for further international financial aid. Lawmakers in Athens supported Papandreou in a 155-143 vote after the prime minister shuffled his Cabinet and sought the chamber’s approval. The vote may bolster Greece’s chances of securing a EUR12bn (USD17bn) loan payment, which hinges on support from European leaders and on Greece’s ability to push through UER78bn in additional budget cuts next week. The Frankfurt-based central bank and German Chancellor Angela Merkel’s government have clashed over the role of private creditors in the Greek rescue, with the ECB resisting Germany’s calls to require investor participation. (Bloomberg)
China - Housing boom spreads to smaller cities, posing dilemma
China’s property boom is shifting from Beijing and Shanghai as government measures to curb the market haven’t kept prices from rising in secondary cities. New home prices rose in 67 of 70 cities in May led by smaller centers as developers hold off price cuts, even as existing home prices cool following higher interest rates and down-payment requirements. Efforts to rein in property prices have been focused on the nation’s largest urban areas, leaving less affluent cities such as Urumqi in the northwest and northeastern Dandong with surging home values as developers increased building there. That raises challenges for a government that last week escalated its fight against inflation by raising bank reserve requirements for the ninth time since October. (Bloomberg)
US - Existing-home sales fell in May to six-month low
Sales of existing US homes decreased in May to the lowest level in six months, a sign that the housing market is lagging other parts of the economy. Purchases of existing homes fell 3.8% to a 4.81m annual pace last month, in line with the 4.8m median estimate in Bloomberg News survey of economists, data from the National Association of Realtors showed. The median sales price declined from a year earlier and 31% of transactions were of distressed dwellings. An unemployment rate hovering around 9% and tight credit standards mean it may take years to absorb the 1.8m distressed properties on the market that are weighing down home values. Persistent weakness in the housing market is one reason why Federal Reserve policy makers are likely to maintain record stimulus when they meet this week.(Bloomberg)
No comments:
Post a Comment