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By New York Times | December 9, 1991
NEW YORK -- Many analysts expect the Federal Reserve Board to follow its move last Friday easing monetary policy with additional moves in a few weeks to bring down the prime rate, now at 7.5 percent.It would put more downward pressure on long-term interest rates, including home mortgages.But after 30 months of watching the Fed push down short-term rates, investors and economists are becoming more convinced that lower rates alone cannot quickly put the economy on track.True, the Fed's rate reductions are probably preventing a more severe economic downturn.
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NEWS
By Eileen Ambrose, The Baltimore Sun | August 25, 2013
Federal Reserve Chairman Ben Bernanke plans to step down when his term expires at the end of January - if not sooner - and President Barack Obama is expected to nominate a successor this fall. Right now, the front-runners appear to be former Treasury Secretary Lawrence Summers, an economic adviser to the president during his first term; and Fed Vice Chair Janet Yellen, No. 2 at the Fed but without close ties to the president. Some dark horses have emerged. Obama, for example, floated the name of Donald Kohn, Yellen's predecessor at the Fed before his retirement in 2010.
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BUSINESS
By JAY HANCOCK | March 6, 2005
SOMETHING bizarre is happening in finance. Alan Greenspan is paying attention to it, and so should we, because it's trying to tell us the future and it's not encouraging. Super-safe, government-insured bank CDs with terms as short as one year are paying 3 percent interest. Yet investors are lending billions to corporations - a riskier bet - for very long terms - riskier still - for not much more. A couple of weeks ago Merck, a pharmaceutical company, borrowed $1 billion in the bond market for 4.75 percent, a stunningly low rate that many bond pros probably thought they'd never see. Or consider that the starter price for a one-year adjustable mortgage is 4.2 percent, a rate that also leaves borrowers completely exposed to possible increases.
BUSINESS
By JAY HANCOCK and JAY HANCOCK,jay.hancock@baltsun.com | December 17, 2008
Fed Chairman Ben Bernanke once famously promised - half-seriously - to drop cash from helicopters if the economy got too bad. With yesterday's decision to cut the short-term cost of borrowed money to nearly zero, one would think he has almost accomplished this. One would be wrong. You can lead a banker to cheap money, but you can't make him ink a loan. Banks aren't lending in enough volume to pull the economy out of its slump. Until they do, the price of short-term credit is largely irrelevant.
NEWS
March 24, 1994
When the Federal Reserve Board boosts short-term interest rates, as it has done twice since early February, long-term interest rates are supposed to fall as investors' fears of inflation wane. Such Fed tinkering with short-term rates, which it controls, is designed mainly to influence long-term rates, which it does not. But as everyone knows, financial markets do not always behave as expected.When the Fed nudged up the rates for overnight bank barrowing to 3 1/4 percent from 3 percent on Feb. 4, we suspect managers of the nation's bank were confounded when long-term rates went up, not down.
NEWS
May 3, 1994
The Clinton administration's tendency to compartmentalize foreign policy -- moving in one area without calculating its effects elsewhere -- has led to major contradictions in its running trade dispute with Japan. For months, the U.S. has been putting the squeeze on Japan to open its markets by allowing the dollar to fall in value against the yen to near-record postwar lows. It did so in blithe disregard of the inflationary pressures this could cause domestically as foreign imports rise in price.
BUSINESS
By NEW YORK TIMES NEWS SERVICE | March 21, 2006
NEW YORK -- Ben S. Bernanke, the newly installed Federal Reserve chairman, suggested yesterday that the central bank will need to pay more attention to global financial conditions in setting interest rates, moving beyond its traditional focus on domestic economic forces. In a speech to the Economic Club of New York at the Grand Hyatt Hotel in Manhattan, Bernanke said that to understand the reasons behind movements in American bond yields "an explanation less centered on the United States might be required."
NEWS
July 24, 1994
After demure silence on the part of the Federal Reserve and benign neglect on the part of the Clinton administration, Washington officialdom is suddenly trying to jawbone a rise in the international value of the dollar. Why so? Because in the opinion of Fed chairman Alan Greenspan a further decline in the greenback could fuel inflation. Because in the opinion of Treasury Undersecretary Lawrence Summer the drooping dollar is a threat to global economic recovery.Neither comment will be welcomed by liberal Democrats eager for economic stimulus from any source before the November elections.
NEWS
February 2, 1995
In doubling short-term interest rates over the past year, the Federal Reserve Board has emerged as the Washington Establishment's only hope for fighting inflation. Once again the wisdom of protecting its independence from political interference has been underscored. The Fed's high marks on monetary policy stand in sharp contrast to flunking grades on fiscal policy by elected politicians.The Fed's decision yesterday to raise short-term interest rates by half a point to 6 percent -- double the level of a year ago -- may indeed slow the growth in gross domestic product from a torrid 4 percent in 1994 to 2.5 or 2.7 percent in 1995.
NEWS
April 20, 1994
Liberal economists may fret and liberal Democrats may flail, but the Clinton administration continues its remarkable if understated support for Federal Reserve Board increases in short-term interest rates.Not one word of criticism has come from the president despite fears within his political party that clamps on the booming economy could hurt its prospects in November's elections. Instead, Mr. Clinton has suggested that concurrent increases in long-term rates beyond the Fed's reach are unjustified in light of the central bank's pre-emptive strike against scarcely visible inflation pressures.
BUSINESS
By Walter Hamilton and Tom Petruno and Walter Hamilton and Tom Petruno,Los Angeles Times | June 8, 2007
Rising interest rates suddenly are giving global stock markets a fear of heights. Shares slumped worldwide yesterday as long-term bond yields surged and several central banks boosted their bellwether short-term rates. U.S. market indexes suffered their biggest declines in three months, with the Dow Jones industrial average sliding 198.94 points, or 1.48 percent to 13,266.73, its third straight loss. But the same force driving interest rates up - a strong world economy - also has underpinned the powerful rally in stocks this year, analysts note.
BUSINESS
By NEW YORK TIMES NEWS SERVICE | March 21, 2006
NEW YORK -- Ben S. Bernanke, the newly installed Federal Reserve chairman, suggested yesterday that the central bank will need to pay more attention to global financial conditions in setting interest rates, moving beyond its traditional focus on domestic economic forces. In a speech to the Economic Club of New York at the Grand Hyatt Hotel in Manhattan, Bernanke said that to understand the reasons behind movements in American bond yields "an explanation less centered on the United States might be required."
BUSINESS
By ANDREW LECKEY and ANDREW LECKEY,CHICAGO TRIBUNE | February 19, 2006
Banks find themselves between a rock and a hard place in 2006. That's because for the first time in more than five years, interest rates on short-term Treasury securities surpassed those of longer-term bonds. Banks traditionally make much of their profit on the difference between the short-term interest they pay on deposits and long-term rates they charge for loans. Bank profits had soared on remarkably low short-term rates until the Federal Reserve began ratcheting rates upward in 2004.
BUSINESS
By JAY HANCOCK | January 1, 2006
For the author of the Book of Revelation, trouble is four horsemen, a black sun and a bloody moon. For Nostradamus, it's a May earthquake and Saturn in the house of Capricorn. For Wall Street, it's the yield on the two-year Treasury bill exceeding the yield of the 10-year Treasury note. Say your prayers and look out below: The "inversion" is here. Or at least it was last week, when short-term interest rates surpassed long-term rates and people searched the skies for a recession, sending the Dow Jones industrial average down 165 points.
BUSINESS
By Andrew Leckey | September 11, 2005
Setting a personal investment strategy in bonds and certificates of deposit is a demanding task in 2005. Short-term interest rates have notched up 10 times since June of last year, directed by the steady hand of the Federal Reserve. But longer-term rates have hardly budged. They're definitely overdue. The odds of Fed Chairman Alan Greenspan raising short-term rates another quarter-percent when policymakers meet Sept. 20, considered a sure thing before Hurricane Katrina devastated the Gulf Coast, are now more of a 50-50 proposition.
BUSINESS
By KENNETH HARNEY | August 14, 2005
COULD THE MISMATCH between short-term and long-term interest rates change the way millions of Americans tap their home equity for remodeling, college tuition, autos and other big-ticket expenditures? Market forces certainly are pushing consumers in that direction, and there is evidence the shift is under way. You can refinance into a conforming 30-year fixed-rate mortgage and take substantial additional cash out for 5 3/4 percent with little or no closing costs. But a new home-equity credit line - pegged at prime plus 1 percent - would run you 7 1/4 percent to start.
BUSINESS
By Lorraine Mirabella and Lorraine Mirabella,Sun Staff Writer | May 21, 1994
Despite harsh weather and rising interest rates, the Baltimore region's housing market grew stronger during the first three months of the year, signaling continuing improvement for the local economy, the U.S. Department of Housing and Urban Development said in a report released yesterday.In a look at the national housing market compared with the first three months of 1993, HUD economists said home sales and construction have improved markedly, based on statistics gathered from state and local governments and housing industry sources in 10 regions.
NEWS
By Robert Kuttner | March 25, 1994
ALAN Greenspan, the Federal Reserve chairman, is betting the health of the economy on a dubious theory. He thinks you can get long-term interest rates down by pushing short-term rates up.The first time Mr. Greenspan tried the trick, it backfired. On Feb. 4, the Fed raised short-term rates a quarter-point, to 3.25 percent. Long-term rates quickly rose, by about half a point.But rather than retreating, Mr. Greenspan concluded that his medicine hadn't been strong enough. This week, at the Tuesday meeting of its policy-setting Open Market Committee, the Fed hiked short-term rates another quarter-point, to 3.5 percent.
BUSINESS
By BILL BARNHART | June 12, 2005
AFTER encouraging rallies last month, the stock and bond markets have stalled. Major stock indexes remain in negative territory for 2005. Forecasts of second-quarter corporate profits are bland. Trading activity appears to be in the summer doldrums. All eyes on Wall Street have shifted from stock prices to interest rates. This is alien territory for most individual investors, but here's a tip: We're all bond traders now. Home-buying is the critical element. The outlook for long-term interest rates, which determine home mortgages, is the bottom line of the investment picture.
BUSINESS
By JAY HANCOCK | June 1, 2005
Alan Greenspan is finally worrying publicly about asset prices. After famously staying silent while the 1990s stock bubble swelled to unsustainable size, the Federal Reserve chairman seems to be responding to critics who say he should coach investors when he thinks they're not getting a good deal. Problem is, investors aren't listening. So far Greenspan's attempts to talk down the bond and housing markets have had zero effect. Such demonstrated impotence might be even worse than if he had never opened his mouth in the first place.
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