With Rates Near Zero, What Will Fed Do Next?
By: Reuters | 25 Jan 2009 | 02:35 PM ET
The Federal Reserve is struggling to explain its plans for pulling the U.S. economy out of recession as it resorts to unorthodox policy tools while official interest rates are set near zero.
Since a rate-setting meeting in December, several U.S. central bank officials have tried to lay out what the Fed can do now that it has run out of conventional ammunition to support economic growth.
Usually, the Fed can focus its policy message around its interest rate target, but with federal funds already close to zero that capability has disappeared with no clearly discernible substitute on the horizon.
Housing starts post larger than expected drop
WASHINGTON (AP) – Jan. 22, 2009 – New home construction plunged to an all-time low in December, capping the worst year for builders on records dating back to 1959.
The Commerce Department reported Thursday that construction of new homes and apartments fell 15.5 percent to an annual rate of 550,000 units last month. That shattered the previous low set in November.
It was a much weaker showing than the pace of 610,000 that economists were forecasting and ended 2008 on a dismal note.
Snowbirds should find lower property tax bills this year
MANATEE COUNTY, Fla. – Jan. 21, 2009 – Florida snowbirds, so long left out in the cold when it comes to lower taxes, may find their property tax bills falling this year – along with real estate market values.
“The people with the biggest break this year will be non-homesteaded property owners whose values dropped,” said Dale Friedley, a tax analyst with the Manatee County Property Appraiser’s Office.
“In most cases those values are dropping between 8 and 15 percent. If their values went down 10 percent and millage is the same, they’ll save 10 percent, compared to last year’s bill,” Friedley added.
In recession, home builders reduce square footage
WASHINGTON – Jan. 19, 2009 – The American dream is shrinking. For the first time in at least a decade, builders are substantially reducing the size of new houses.
“We’re trending toward smaller homes,” says Gopal Ahluwalia, director of research for the National Association of Home Builders. He says growth in the average size of new single-family homes, which went from 1,750 square feet in 1978 to 2,479 in 2007, is starting to reverse.
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