Business

Fed´s predictions make markets a bit more optimistic
by Zuzana Zelenakova

All indicators suggest that the recovery in the US is most likely to be slow and definitely not smooth. Originally, the government estimated third quarter economic growth to be about 3.5 percent. However, the reality is different and revision had to be made. The growth fell to 2.8 percent. The consumer situation is not very encouraging either. People remain skeptical, especially with Christmas season in sight. Also unemployment remains high and as Federal Reserve officials warned earlier this month most probably the trend will continue for the next several years. Rising unemployment rates could further damage consumer confidence and subsequently obstruct the recovery. "It ! will take some time, in my opinion, to get back on a steady pathway to a pace of growth that will result in significant job creation. We are in for a long slog," said Richard Fischer, president of the Federal Reserve Bank of Dallas. The stocks that were dropping as a result of these reports strengthened once again after the Federal Reserve latest meeting, during which it promised to keep interest rates near zero until the end of next year at least and informed that inflation is under control. With Fed´s latest growth forecast out the dollar continues its downward trend as opposed to other major currencies. Also the fact that most of Asian and European stocks jumped after the Fed expressed positive feeling and confidence in the recovery contributed to the pressure put on the US dollar. "There are people that have done quite well and maybe they want to protect themselves, but fear and greed still drive the market and I think there are plenty of people out there that want! in on the action," said William Rutherford, president of Ruth! erford I nvestment Management in Portland, referring to the fact that for many investors assets such as the dollar have become most attractive as they try to secure their gains.

related story (sgx15996): http://news.yahoo.com/s/ap/20091124/ap_on_bi_st_ma_re/us_wal...

by Zuzana Zelenakova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketN! ews is everyone's way of keeping in touch with the World.

posted by Blog TechSource @ 1:16 PM