Archive for April 6th, 2011

Home Mortgage Interest Rates On Rise Says FED

The economy of the United States is not ready for an increase in interest rates a Federal Reserve official has claimed. Dennis Lockhart, the president of the Federal Reserve of Atlanta termed the current economic situation in the country too delicate to withstand a rise in interest rates.

He further said that the Federal Reserve would remain on schedule to finish its bond buying program before July and there was no reason in his opinion to deviate from this plan.

When reporters asked Lockhart that leaked minutes of the Federal Reserve’s latest policy meeting showed that some of the members had started considering an increase in Interest rates, he replied that it would be pre mature at the moment. Lockhart said that actually he had not even given it a thought for now.

While talking to reporters he explained that there was still some fragility in the economy as it tried to recover from the economic crisis. He further said there was no need to take a U turn on the current course that they were following. He was attending an Atlanta Federal Reserve conference in Stone Mountain Georgia.

The economy of the United States of America has shown some signs of recovery recently. It expanded by a little over than 3% in the fourth. Unemployment figures have improved quickly in recent months and have come down to 8.9%.

Lockhart said that inflation was still not a big issue for them and actually the rise in prices was a desirable event for policymakers. Many of these policymakers had shown concerns last year of a deflationary spiral occurring in the United States.

He said that the recent rise in prices were due to the mechanics of supply and demand rather than the interest rate policy of the Federal Reserve. However Lockhart did say he expected prices of commodities to become stable eventually.

Lockhart did however admit that he had not yet decided on a preferred plan about how the United States would break off from its loose monetary policy. He did say that the Federal Reserve would most likely take a look at a very aggressive plan proposed by the Philadelphia Federal Reserve.