Federal Reserve officials tomorrow will probably drop their 15-month-old view that weak growth is the biggest risk to the US economy, signaling higher interest rates are coming later this year.
Faster-than-expected fourth-quarter growth, the first increase in jobs since July, rising factory production, and robust retail sales all underscore that the recession that began a year ago is ending, as Fed Chairman Alan Greenspan told Congress earlier this month.
By changing their outlook, central bankers know they are likely to push up some borrowing costs for businesses and consumers, even if they don't raise the Fed's own benchmark lending rate from the current 40-year low of 1.75 percent, analysts said.
"The downturn is over," said former Fed Vice Chairman Alan Blinder, now an economics professor at Princeton. "The challenge now is to tighten, but not do it too abruptly so you stifle recovery."
Analysts at 14 of 22 banks and securities firms that trade directly with the Fed told Bloomberg News that recent economic statistics, and Greenspan's latest remarks, mean the Fed will drop language in its post-meeting statement that "risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future."
The yield on the 10-year Treasury note, to which many residential mortgages are tied, has risen more than a quarter- percentage point since Greenspan's March 7 congressional testimony. In turn, the average rate on a 30-year fixed mortgage rose last week to 7.08 percent from 6.87 percent a week earlier, according to Freddie Mac, the No. 2 buyer of US mortgages.
"Rates for mortgages and auto-financings are already going up and could do so further," said Mark Zandi, chief economist at Economy.com in West Chester, Pennsylvania.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from