Category Archives: Federal Reserve News

US growth picks up in Q3

Figures show better-than-expected growth figures during Q3 of 2016Emerging from the doldrums

The pace of US growth recovered sharply in the third quarter, peaking at its highest rate in two years and lending credence to forecasts that the country is on track for greater economic stability as 2016 draws to a close.

The economy expanded at a 2.9 percent annualised rate in the third quarter, up from 1.4 percent in the second quarter, which topped predictions of a more modest rate of 2.6 percent and reflected a spike in exports as well as an increase in federal spending, according to the US Commerce Department.

That said, consumption growth – another key indicator of the health of the economy – dropped back over the same period to just 2.1 percent, down from more than double that figure in the previous quarter, and falling a long way short of the expected 2.6 percent benchmark.

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US economy feeling the pinch as lines of credit are squeezed

Businesses treading water as banks tighten standards relating to applications for credit

Credit tightening – a sign of the times?

For a society that runs largely on credit, when loans start drying up, the wheels of commerce grind to a shuddering halt.

In a survey recently conducted by the Federal Reserve, signs are emerging that lines of credit are being increasingly squeezed, with loans to businesses on commercial and industrial (C&I) and commercial real estate (CRE) being subject to tougher standards over the second quarter of 2016 than in the past three quarters.

Businesses looking for C&I loans to buy new equipment or relocate are finding it harder to access the credit they need as banks continue to tighten their criteria for lending, especially for medium- and large-sized companies.

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Federal Open Market Committee holds interest rates steady

US interest rates remain on hold as the Fed looks for more certainty before signalling a hikeRates on hold

The announcement by the Federal Open Market Committee (FOMC) to hold US interest rates steady in July came as no surprise to market analysts who had felt that the threat of economic uncertainty and the imminent presidential election would prevent the Federal Reserve from making any hasty decisions to hike the rate in the short term.

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Are US interest rates set to rise again?

The Federal Reserve looks set to hike US interest rates in the coming monthsA fresh rate hike on the horizon?

It’s thought that the Federal Reserve will signpost more interest rate hikes this year, six months after it increased rates for the first time in almost ten years.

In their April meeting, Fed members voted overwhelmingly to keep interest rates unchanged amid concerns about the sluggish growth of US economy in the first quarter, Britain’s potential exit from the EU and uncertainty over China. After the Fed raised rates in December, it was expected to repeat the process four times this year, a forecast which has since been adjusted to two hikes.

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US economic recovery slows

New figures show the US economy slowed in the final months of 2015Recovery is slowing

New figures released by the Commerce Department show that the US economy slowed to a virtual halt in the final three months of 2015, its annual rate rising at just 0.7% amid signs of a global economic slowdown. Consumers and businesses alike scaled back their spending and US exports were reduced. The lower-than-expected rate is likely to fuel concern that gains made over the last six years are now losing ground.

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What next for the global economy?

Global economy pulling in two directions as Federal Reserve gets ready to raise ratesAll systems go

With businesses poised for news of an interest rate rise this month, the world’s economy seems to be pulling in two directions. A gentle nudge from 0.25% to 0.5% may not seem like a major move for the Federal Reserve but it’s a move that would have sparked anxiety a year or so ago and will mark the transition towards a more optimistic outlook in the US.

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