7 in annualized pace Tokyo said yesterdayAfter two months a report is sent to HRDSovereign in the spirit of Olivier Japiot it rhymes with landDoes that change the game with the seasons A million jobs have been generated on eBayAmerica it is less likely to procrastinateIt is not supported the idea of need helpWe continue our discussions with the unions in the coming weeksThus is the operation more also collegialAs a general rule this factor is positiveAfter massively declining interest rates, the Fed stands ready to act against the deterioration of the US economy. This was stated yesterday, its Chairman Ben Bernanke, at a hearing before the US Senate Banking Committee. While signs of slowdown are multiplying, the Fed "act in time, if necessary, to support the growth and provide adequate insurance against lower risk", he said. On a background of real estate crisis and the credit market crisis, the risks to growth increased according to him.
In difficulty, banks tighten credit valves, lending more parsimonious way to households and businesses. "More expensive and more restrictive credit conditions, will probably continue to weigh on growth," said Ben Bernanke. As banks should save new writedowns in his. Beyond the inflation of the rent for the money, the decline in equity markets and the weakening of the labour market also threaten to weigh on household consumption, which is the main engine of growth in the United States.
Under these conditions, "economic prospects have deteriorated in recent months and lower risks to growth have increased," said the Chairman of the Fed. He announced that the Federal Reserve should lower its growth forecasts for 2008, even if it be on a rebound of activity at the end. Its baseline scenario relies on "a period of slow growth which will be followed by a period of a little more strong growth from the end of the year", when the monetary policy and fiscal stimulus of President Bush's plan would begin to bear fruit, he said.
Aggressive policy
In the meantime, the concerns of Ben Bernanke weighed on the New York Stock Exchange. The Dow Jones index yesterday conveyed 1.4, to 12.376,98 points. The greenback also declined, with 1,4631 dollar for 1 euro. "Operators especially retained the speech from Ben Bernanke that economic conditions would deteriorate once again during the year, in the United States." "This has bolstered their expectations of further declines in the Fed rate," said Cyril Regnat, strategist at Natixis.
While the Federal Reserve lowered by 225 basis points interest rates since September, to 3, markets expect to a new loosening of 50 basis points of its rates at its next meeting, on 18 March. And they see them fall to 2 this summer, their expectations on the futures markets.
Worn by these expectations, US Government bonds, benefiting acts of monetary easing, have soared in recent weeks. The performance of the loan of American State for 2 years, evolving in contrast to its price, relaxed to fall up to 1,872 yesterday in a session, before closing at 1,888. Despite these very low levels, some believe that American sovereign obligations can still advance, worn by fears of recession in the United States.
"Us long rates have not exhausted their downside potential, while extreme scenarios are now circulating on the market", said Vincent Chaigneau, responsible for the policy rate and changes for Société Générale. "The question now for some is whether if a harsh recession can be avoided, and if the Fed is not likely to lower interest rates up to 1 in 2003".
