Archive for the ‘central bank’ Category

Stocks soar, Dow rises 420 points

March 18, 2008
By MADLEN READ, AP Business Writer 

NEW YORK – Wall Street stormed higher Tuesday as investors, optimistic following stronger-than-expected earnings from two big investment banks, were also galvanized by the Federal Reserve‘s decision to cut interest rates by three-quarters of a percentage point. The Dow Jones industrial average soared 420 points, its biggest one-day point gain in more than five years.

Trader Vincent Quinones, foreground right, gathers with other ...
Trader Vincent Quinones, foreground right, gathers with other traders on the floor of the New York Stock Exchange, Tuesday March 18, 2008. Wall Street gave up some of its steep gains Tuesday while investors digested the Federal Reserve’s decision to cut interest rates by three-quarters of a percentage point. Many investors had expected a cut of a full percentage point.(AP Photo/Richard Drew)

Many investors were expecting the Fed to cut rates a full point, but appeared to overcome their early disappointment, especially since a 0.75 point cut is still substantial. The central bank’s benchmark fed funds rate is now at 2.25 percent — its lowest level since December 2004, and less than half what it was last summer. The Fed began lowering rates exactly six months ago, after the credit markets seized up due to soaring defaults in subprime mortgages.

In its statement accompanying the rate decision, the Fed said “recent information indicates that the outlook for economic activity has weakened further,” but also that “uncertainty about the inflation outlook has increased.”

“The Fed once again in the statement showed that it is ready for further action if this were needed,” said Christian Menegatti, lead analyst for online economic research firm RGE Monitor. “It also showed the fact that it’s still paying attention to inflation … but that it is far from being the primary concern right now. And the market knows that, and it is happy.”

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Economy: Another Fed Rate Cut Anticipated Tuesday

March 15, 2008
By JEANNINE AVERSA, AP Economics Writer

WASHINGTON – Desperate to aid an economy in crisis, the Federal Reserve is ready to deliver yet another big interest rate cut.
Federal Reserve Chairman Ben Bernanke testifies before the House ... 
Federal Reserve Chairman Ben Bernanke testifies before the House Financial Services Committee about the latest measures to heal the U.S. economy, on Capitol Hill in Washington in this file photo from Wednesday, Feb. 27, 2008. Desperate to provide relief, the Federal Reserve is ready to deliver another big rate cut. Just how deep of a cut is something Bernanke and his central bank colleagues will be weighing when they meet Tuesday, March 18. Some economists are predicting a half-point reduction, while investors and others are hoping for a more hefty, three-quarters cut. (AP Photo/J. Scott Applewhite)

How big? One-half of a percentage point, some economists say. Investors and others hope for even more, a three-quarters cut or perhaps a full point, given the turmoil on Wall Street. It will be a close call, Fed watchers say.

The speculation ends Tuesday afternoon after Fed Chairman Ben Bernanke and central bank policymakers have met.

Whatever the decision, for a growing number of analysts, one more rate reduction will not be the lifeline that pulls the country back from the brink of the first recession since 2001.

Experts in this camp believe the economy is shrinking now because of the fallout from the housing and credit debacles. Businesses are shedding jobs, Wall Street is convulsing, energy prices are skyrocketing and people are reluctant to spend. Yet these economists say lower interest rates should help cushion the blows of a recession.

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Taiwan holds world’s 4th-largest foreign currency reserves

January 5, 2008

Taipei – Taiwan holds the world’s fourth-largest foreign currency reserves after China, Japan and Russia, the central bank said on Friday. By the end of December 2007, Taiwan’s foreign currency reserves totaled 270.3 billion US dollars, up 221 million US dollars from November, the central bank said. The foreign currency reserves of the other three countries were China’s 1.433 billion (3rd Quarter of 2007), Japan’s 946.1 billion (November) and Russia’s 354.6 billion (November).

Taipei - Taiwan holds the world's fourth-largest foreign currency reserves after China, Japan and Russia, the central bank said on Friday. By the end of December 2007, Taiwan's foreign currency reserves totaled 270.3 billion US dollars, up 221 millio...