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Fed's Lockhart: heightened uncertainty on economy 12 minutes ago Federal Reserve Bank of Atlanta President Dennis Lockhart said on Monday there was heightened uncertainty due to financial turmoil and he expected weak but modest economic growth in the first half of this year. "The negatives in our economy may be gaining momentum," he said in a speech to the Rotary Club of Atlanta. "I think these circumstances call for policy-makers to be prepared to respond pragmatically to whatever developments arise." The Fed holds its next rate-setting meeting on January 29-30, where markets widely anticipate another rate cut. Lockhart is not a voting member this year on the Federal Open Market Committee. Giving what he called a "sober message" for his economic outlook for the year, Lockhart said he expected a weak first half of 2008 but one of modest growth, with improvement beginning the second half and continuing into 2009. However, that outcome assumed that the housing situation would not deteriorate more than expected, and financial markets stabilize. "A sober assessment of risks must take into account the possibility of protracted financial market instability together with weakening housing prices, volatile and high energy prices, continued dollar deprecation, and elevated inflation measures following from the recent upticks we've seen," he said. The Atlanta Fed president also said he was "troubled" by the elevated level of inflation. While he was basing his forecast on the view that inflation will moderate this year, recent rises in oil prices -- which briefly hit $100 a barrel -- could mean his outlook was "too optimistic," he said. But he said the key issue would be how much the ongoing financial turbulence, which stemmed from losses in U.S. mortgage assets, would affect the broader economy. Lockhart, who comes from a banking background, said his Wall Street contacts held "serious concern about further -- and spreading -- market deterioration and potential spillover into the broader economy." "Trading conditions are still far from settled and orderly," he said, and to restore market confidence, leading financial firms should disclose losses, restore capital and liquidity ratios and improve risk assessment. On monetary policy, Lockhart said the Fed's rate cuts since last September were aimed to forestall potential fallout from financial turmoil on the economy, but were not sufficient to fix strained market conditions. The Fed has cut the benchmark federal funds rate by a full percentage point in three consecutive rate-setting meetings since last September. Lockhart said that global coordinated efforts by major central banks at the year-end had been helpful in easing liquidity tensions. Last month, the Fed, the European Central Bank and the British, Canadian and Swiss central banks jointly announced they would take measures to address tight conditions in the money market. The U.S. central bank set up a new auction facility to provide funds to a wider range of banks and also extended dollar funds to the ECB and Swiss National Bank through currency swap agreements. (Reporting by Tamawa Kadoya; Editing by Andrea Ricci) http://news.yahoo.com/s/nm/20080107/bs_nm/usa_fed_lockhart_d… |
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| aus der Diskussion: | Tages-Trading-Chancen am Montag 07.01.2008 |
| Autor (Datum des Eintrages): | HMHM2007 (07.01.08 19:35:51) |
| Beitrag: | 584 von 729 (ID:32971368) |
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