The Federal Reserve hiked interest rates for the first time in nearly a decade on Wednesday, signaling faith that the U.S. economy had largely overcome the wounds of the 2007-2009 financial crisis. The U.S. central bank's policy-setting committee raised the range of its benchmark interest rate by a quarter of a percentage point to between 0.25 percent and 0.50 percent, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs. "With the economy performing well and expected to continue to do so, the committee judges that a modest increase in the federal funds rate is appropriate," Fed Chair Janet Yellen said in a press conference after the rate decision was announced. "The economic recovery has clearly come a long way." The Fed's policy statement noted the "considerable improvement" in the U.S. labor market, where the unemployment rate has fallen to 5 percent, and said policymakers are "reasonably confident" inflation will rise over … [Read more...] about Fed raises interest rates, citing ongoing U.S. recovery
5 year closed mortgage rates
The first Chinese interest-rate cut in more than two years is a stark recognition that the world's second-biggest economy is in trouble. After years of piling ever more public debt onto the national balance sheet, it makes sense to have the People's Bank of China take the lead in propping up gross domestic product. Yet while today's benchmark rate cut should help stabilize growth, the move also adds to worries about looser credit that could pose risks to the global economy. Case in point: mortgages. Earlier this year, Chinese officials took several stealthy steps aimed at stabilizing the property sector and bolstering GDP growth. The China Banking Regulatory Commission loosened lending policies. Even before cutting the one-year lending rate to 5.6 percent and the one-year deposit rate to 2.75 percent today, the central bank had cut payment ratios and mortgage rates, while prodding loan officers to ease up on their reluctance to approve borrowers without local household registrations. … [Read more...] about Is China building a mortgage bomb?
Vietnam State Bank (SBV) has just lowered the short-term ceiling deposit interest rate and asked credit institutions to reduce lending rates with corresponding levels, especially for medium-term and long-term loans, which receives enthusiastic agreement from enterprises. However, enterprises are especially concerned in the long-term stability so that they can boldly make loans to invest in production and business operation. … [Read more...] about To lower interest rates: The need for stabilizing policies
China eliminated the lower limit on lending rates offered by the nation's financial institutions as economic growth slows and authorities expand the role of markets in the world's second-biggest economy. The change, effective today, removes a floor set at 30 percent below the current 6 percent benchmark, according to a People's Bank of China statement yesterday. While the move temporarily jolted world stocks higher, the PBOC acknowledged that it was a limited step and said that freeing up deposit rates would be more important. The shift came as central bankers and finance ministers from Group of 20 nations gathered in Moscow, and after a cash squeeze in money markets curbed a record expansion in China's credit. "While deposit-rate liberalization is still possible, the fact that a decision was made to just remove the lending-rate floor suggests that more aggressive liberalization proposals were defeated, or at least delayed," said Ken Peng, senior economist at BNP Paribas SA in … [Read more...] about China removes floor on lending rates as economy slows
"Until recently I didn't have any strong intention to buy a house," says Ngoc, who borrowed four billion dong ($192,000) to purchase a three-story property about 1 kilometer south of Ho Chi Minh's mausoleum. "Property prices are going down. Interest rates are good. The timing is very good." Home loan applications have jumped since March, with buyers lured by 500 basis points of interest rate cuts, price declines of as much as 15 percent, and smaller, more-affordable apartments being offered by developers. Banks are skirting rules and may risk a cash crunch to meet demand: all have violated the central bank's 30 percent cap on the use of short-term funds for loans with terms longer than a year, State Bank of Vietnam Governor Nguyen Van Binh said July 20. "If you increase your exposure to the mortgage market but still have a lot of short-term funding, you will end up with a massive funding mismatch," said Fiachra MacCana, managing director of Ho Chi Minh City Securities Corp. "The … [Read more...] about Vietnam banks violate loan rules on homebuyer demand: mortgages