Federal Reserve

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Falling Interest Rates Whack Legal Aid Groups

Funds tied to Fed's benchmark rate

(Newser) - There’s been some collateral damage from the Federal Reserve’s slashing of interest rates: legal aid societies. These groups, which aim to help the poor in civil cases, such as unemployment or foreclosure disputes, have long relied on little-known programs to draw interest from short-term deposits from clients. With...

2008 Inflation Slowest in 50 Years on Oil Prices, Economy

Slow spending, sliding energy costs lead to 0.1% CPI increase last year

(Newser) - In 2008, consumer prices crept up at the slowest rate since 1954, climbing just 0.1% for the year and missing the Fed’s preference of 1.5% to 2% by a wide margin, the Wall Street Journal reports. Just months after inflation hit 17-year highs, a 75% drop in...

Mortgage Rates Plunge to Lowest Ever

But plunging house values make refinancing impossible for many homeowners

(Newser) - The benchmark 30-year mortgage interest rate has fallen below 5% for the first time ever as the collapsing economy continues to force interest rates down. Adjustable-rate mortgages fell to 5.25%, reports MarketWatch. But many homeowners can't take advantage of the new low rates to refinance because the value of...

Citi Paces Dow's 248-Point Drop
 Citi Paces Dow's 248-Point Drop 
MARKETS
Jan 14, 2009 3:29 PM CST

Citi Paces Dow's 248-Point Drop

Economic news and financial upheaval mean losses for stocks

(Newser) - Financial shares led stocks to deep losses today as a set of economic reports did little to reassure investors, MarketWatch reports. Citigroup lost 23.05% on news it will shed several units, while an index fund of financial shares dropped nearly 5%. The Dow closed down 248.42 at 8,...

Bailout Hasn't Failed, But Banks Need More

(Newser) - The Wall Street bailout has not failed, but it hasn’t worked yet, either, as evidenced by the renewed call from Barack Obama and the Fed to release more TARP funds, the New York Times reports. Banks that received bailout funds are clamoring for more to stabilize their finances, but...

Illegal Hire, Tax Issues May Trouble Geithner

GOP's Grassley on Treasury nominee's case ahead of hearings

(Newser) - Timothy Geithner’s Treasury secretary nomination could be threatened by allegations he hired illegal help and didn’t pay Social Security and Medicare taxes while self-employed, the Wall Street Journal reports today. Senate Finance Committee members are meeting privately to discuss the issues, raised by GOP Sen. Charles Grassley. Aides...

30-Year Mortgage Rates Fall to Record Low 5.01%

Fed buys $10.2B in agency mortgage bonds

(Newser) - Interest rates on 30-year fixed mortgages fell to a record low 5.01% this week, Bloomberg reports. The drop—the 10th weekly fall in a row—comes as the Federal Reserve purchased $10.2 billion of mortgage-backed securities from Fannie Mae, Freddie Mac, and Ginnie Mae as part of a...

Next Bubble May Be in Treasuries
Next Bubble May Be
in Treasuries
ANALYSIS
Jan 6, 2009 8:15 PM CST

Next Bubble May Be in Treasuries

But the rest of the bond market is attractively priced

(Newser) - As the credit and stock markets collapsed, investors rushed to Treasuries as the safest possible bet. But the rush to safety could be fueling a bubble, writes Andrew Bary for Barrons. Yields have been plummeting, with 10-year notes at 2.4% and three-month bills selling last week for 0.05%....

Fed Sees Recession Lingering Through '09

(Newser) - The Federal Reserve anticipates the recession will continue through 2009 despite its recent rate slash and other planned “nontraditional policies,” the Wall Street Journal reports. Minutes of the Fed's December 15-16 meeting, at which it cut rates to nearly zero, indicate a deep pessimism about the economy. Officials...

Obama Must Spend Boldly— or It's Great Depression II

Only government can save us now: Krugman

(Newser) - For decades economists believed that a second Great Depression was impossible; all the Fed had to do, they said, is print more money. But as Paul Krugman writes, monetary policy has failed; despite "supplying liquidity like an engine crew trying to put out a five-alarm fire," credit remains...

GM Finance Arm Converts, Will Tap Bailout

Fed approves GMAC's request to become bank-holding company

(Newser) - The Federal Reserve today approved a request by General Motors’ financial arm to become a bank-holding company so it can petition for money from the $700 billion bailout pot, the Wall Street Journal reports. GMAC would also have access to direct Fed loans, helping loosen credit and complement the $17....

Bank of Japan Follows Fed, Cuts Rates to Near Zero

It drops key interest rate to 0.1%

(Newser) - The Bank of Japan cut interest rates from 0.3% to to 0.1%, within the historic zero- to quarter-percent range that the Fed chose earlier this week. Central bankers were responding to a deep recession as well as a soaring yen, which recently hit a 13-year high against the...

Feds Overhaul Credit Card Rules
 Feds Overhaul
 Credit Card Rules 
Dec 18, 2008 11:53 AM CST

Feds Overhaul Credit Card Rules

New rules will tighten interest rates, could cost issuers $10B in revenue

(Newser) - Credit card companies will be forbidden from raising interest rates on existing debt after major changes to federal regulations OK'd today go into effect, USA Today reports. Starting in July 2010, the new rules will also restrict issuers' ability to cherry-pick higher-interest parts of balances to pay down first, and...

Fed Hangs Recovery Hopes on Nothing
Fed Hangs Recovery Hopes on Nothing
ANALYSIS
Dec 18, 2008 11:42 AM CST

Fed Hangs Recovery Hopes on Nothing

Cutting benchmark rate to zero points up risks of plenty of nothing

(Newser) - Nada. Naught. Zip. Zero, as in the 0% interest the Federal Reserve is asking banks to pay—or, rather, not pay—for short-term loans. What does getting zero back for loaning money mean, wonders Paul Farhi of the Washington Post. "The strategy is to hose down America's sclerotic financial...

'Helicopter Ben' Should Shower Us With Cash
'Helicopter Ben' Should Shower Us With Cash
OPINION
Dec 17, 2008 11:56 AM CST

'Helicopter Ben' Should Shower Us With Cash

Fed can prevent deflation, but problems lurk down the line

(Newser) - With interest rates functionally zero, Ben Bernanke is soon going to have to resort to the central banker's ultimate weapon: printing cash and showering Americans with money. There's no question that the "helicopter drop" will prevent the dreaded spiral of deflation, writes Martin Wolf in the Financial Times....

Fed Cuts Rate to 0%-0.25%
 Fed Cuts Rate to 0%-0.25% 
Dec 16, 2008 1:40 PM CST

Fed Cuts Rate to 0%-0.25%

Target is record low as Reserve battles recession

(Newser) - The Federal Reserve today cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession. The central bank says it reduced the federal funds rate, the interest that banks charge...

Stocks Creep Up as Inflation Falls
 Stocks Creep 
 Up as Inflation Falls 
MARKET Open
Dec 16, 2008 8:44 AM CST

Stocks Creep Up as Inflation Falls

Fed expected to cut yet more

(Newser) - Stocks stepped higher at the open today, as investors awaited what many assumed would be an interest rate cut from the Federal Reserve. The Dow rose 77 points, while the Nasdaq and S&P added 1.6% and 1.4% respectively. Investors also learned that inflation took its biggest dive...

Record Low Rates Leave Investors Cold

Cut is likely tomorrow, but Wall Street wants more varied approach

(Newser) - Tomorrow the Federal Reserve will probably cut its target interest rate to 0.5%, the lowest in decades. But, the Wall Street Journal reports, investors are unlikely to be cheered by a further slash, instead waiting to hear what further measures Fed chief Ben Bernanke is preparing now that interest...

Stocks Tread Water at Bell
 Stocks Tread 
 Water at Bell 
MARKET Open
Dec 15, 2008 8:53 AM CST

Stocks Tread Water at Bell

Dow inches downward

(Newser) - Stocks jogged in place at the open as investors awaited smoke signals from the latest Fed meeting. The Dow inched up15 points, while the Nasdaq and S&P added 0.1% and 0.4% respectively, the Wall Street Journal reports. Investors are also awaiting President Bush’s auto rescue plan,...

Fed Close to OK'ing Credit Card Relief

Thursday vote may ban surprise interest rate hikes, fees

(Newser) - The Federal Reserve is poised to hand credit card companies a long-awaited blow this week, Reuters reports. A vote on Thursday is expected to approve 1,000 pages of consumer protections, including bans on surprise rate hikes and fees. Companies say the changes will force higher rates, but with Democrats...

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