Posts Tagged ‘US Federal Reserve’

Weekly Update of The Market (1st – 5th February) Part 1

Hello Friends, here, we bring you the weekly overview of the Indian as well as of the Global economy and along with the latest global business and industry updates.

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Weekly Update of The Market (1st - 5th February) Part 1

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A bout of volatility was witnessed in the domestic market throughout the week due to

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1.  F&O expiry,

2.  unfavorable global cues because of gloomy earnings forecast,

3.  anxiety about China‘s monetary tightening,

4.  the deteriorating finances of countries ranging from Greece to Japan and

5.  India’s central bank‘s decision to raise the CRR to 5.75.

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🙂

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But on later days of the week, US Federal Reserve’s decision to keep interest rates unchanged boosted sentiments of global markets.

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Closer home, investors also heaved a sigh of relief as the central bank kept key interest rates unchanged at the quarterly policy review indicating that it would maintain a balance between price stability and growth and raised its GDP growth projection for the current fiscal to 7.5 %.

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The RBI at its quarterly monetary policy review raised CRR by 75 basis points to suck out excess liquidity from the banking system to the tune of Rs 36000 crore.

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On the flip side, the challenges that RBI foresees for the economy is fiscal consolidation.

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The central bank lifted its wholesale price index inflation forecast for the end of the fiscal year in March 2010 to 8.5% from its earlier forecast of 6.5%.

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RBI also said it expected inflation to moderate starting in July 2010, assuming a normal monsoon and global oil prices holding at current levels.

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Moreover, US Federal Reserve too maintained interest rates at near zero levels and vowed to do so for an extended period of time.

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Additionally, it also signaled its intention of unwinding the massive monetary stimulus that it had undertaken during the peak of the crisis.

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🙂

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Stay Tuned for More on weekly updates.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

US Economists feel Positive, says Worst is Behind :)

Worst is behind :)

Among the world’s large economies, UK, which is the seventh largest and Italy, the tenth, remain in recession, like the US.

The UK economy shrunk 0.8% in the second quarter, while Italy’s was down 0.5%.

😦

Unlike in the UK, however, economists in the US believe the worst may be behind them.

‘‘It’s quite possible, though not certain, that retrospectively, we’ll say that the recession ended in July or August, may be September,’’ Nobel laureate Paul Krugman was quoted as saying.

🙂

There is evidence that his is not undue optimism.

The pace of job losses in the US slowed more than forecast in July and the unemployment rate dropped for the first time in more than a year.

US GDP also shrank by just 0.3% (equivalent to an annualized 1%) in the seconnd-quarter after a 6.4% drop in the previous three months.

🙂

That explains why US Federal Reserve is willing to bet that the nosedive the economy had witnessed in recent months is behind it.

🙂

Over the last two years, the US has witnessed its worst financial crisis in decades, but that could be ending, which is good news for the world since it accounts for a fifth of global GDP.

🙂

France and Germany also announced unexpected returns to the growth path, which means that four of the world’s five largest economies and six of the top 10 are now not in recession.

🙂

Adding to the sense of optimism, the US Federal Reserve left rates unchanged, saying that the world’s largest economy was showing signs of levelling out.

🙂

Among the five largest economies of the world, measured in purchasing power parity (PPP) dollars — which is more of an apples to apples comparison — China and India are already growing at healthy rates, although lower than their own pace for the last few years.

🙂

Japan too has climbed out of recession and so has Germany.

These economies and the US account for 47% of world GDP in PPP terms.

🙂

Among the world’s other large economies, Brazil is also now no longer in recession having grown by 1.5% in the second quarter.

Among the world’s large economies, UK, which is the seventh largest and Italy, the tenth, remain in recession, like the US. The UK economy shrunk 0.8% in the second quarter, while Italy’s was down 0.5%.

Unlike in the UK, however, economists in the US believe the worst may be behind them. ‘‘It’s quite possible, though not certain, that retrospectively, we’ll say that the recession ended in July or August, may be September,’’ Nobel laureate Paul Krugman was quoted as saying.

There is evidence that his is not undue optimism. The pace of job losses in the US slowed more than forecast in July and the unemployment rate dropped for the first time in more than a year. US GDP also shrank by just 0.3% (equivalent to an annualized 1%) in the seconnd-quarter after a 6.4% drop in the previous three months.

That explains why US Federal Reserve is willing to bet that the nosedive the economy had witnessed in recent months is behind it. Over the last two years, the US has witnessed its worst financial crisis in decades, but that could be ending, which is good news for the world since it accounts for a fifth of global GDP.

Some light showed up at the end of the recession tunnel on Wednesday as France and Germany announced unexpected returns to the growth path, which means that four of the world’s five largest economies and six of the top 10 are now not in recession.

Adding to the sense of optimism, the US Federal Reserve left rates unchanged, saying that the world’s largest economy was showing signs of levelling out. Both France and Germany had been predicted by most economists to face a decline of about 0.3% in their GDPs for the second quarter (April-June) of 2009, but they surprised themselves and the rest of the world by announcing that they’ve actually recorded growth of 0.3% each.

Among the five largest economies of the world, measured in purchasing power parity (PPP) dollars — which is more of an apples to apples comparison — China and India are already growing at healthy rates, although lower than their own pace for the last few years. Japan too has climbed out of recession and so has Germany. These economies and the US account for 47% of world GDP in PPP terms.

The Eurozone as a whole is also now projected to have contracted by just 0.1% compared to the 2.5% fall in GDP in the first quarter (January-March). The growth rates reported by Germany and France may seem like nothing to get excited about, but considering that German GDP shrunk by 3.5% in the first quarter and France’s by 1.3%, it is quite a smart turnaround.

Among the world’s other large economies, Brazil is also now no longer in recession having grown by 1.5% in the second quarter.