Fed Says Growth Likely To Return

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Federal Reserve Chairman Ben Bernanke offered his most optimistic outlook on the economy since the financial crisis began last September. Bernanke, during his Jackson Hole Wyoming speech said, “After contracting sharply over the past year, economic activity appears to be leveling out, both in the United States and abroad, and the prospects for a return to growth in the near term appear to be good”.

The National Association of Realtors reported that home sales increased by 7.2% in July. Good news for the housing market, but 1/3 of all home sales were foreclosed properties. Inventory of homes in foreclosure increased to 4.3% while 90 day delinquent loans rose to 7.97%, a record. Overall delinquency rose to 9.24% of all mortgages… another record and up from 9.12% in the first quarter. The hidden inventory of homes in mortgage default is vast.

Bernanke qualified his optimistic statement saying, “Strains persist in many financial markets across the globe, financial institutions face additional losses, and many business and households continue to experience difficulty gaining access to credit”. Adding, “Because of these and other factors, the economic recovery is likely to be relatively slow at first, with unemployment declining only gradually from high levels”.

This speech was more a reflection and defense of the Feds actions over the past year with less emphasis on the future forecast but instead an optimistic view of an over all slow global growth period.

Related posts:

  1. Bernanke Expects Housing Recovery
  2. Mortgage Delinquencies Surge
  3. California Housing Woes To Continue
  4. Democrats Say Lenders Are Falling Short
  5. ‘Seasonality Disorder’ In The Housing Market?

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