Top Interest Rate Headlines 04-27-11: Fed Forecasts Show Transitory Inflation and Lower Growth in 2011

Fed Forecasts Show Transitory Inflation and Lower Growth in 2011
By Joshua Zumbrun, Bloomberg
Federal Reserve officials forecast that a measure of prices will rise between 2.1 percent and 2.8 percent this year before moderating, underscoring their view that inflation pressures will be “transitory.”
http://jlne.ws/lQ9PsH

At 15% to 50% of Tier 1, Underwater Home Equity Stirs Unease
American Banker
Delinquencies have stabilized and chargeoffs have eased, and the second dip in home prices has not been remotely as severe as its older twin.
http://jlne.ws/j1t0gF

CFTC Proposes Protecting Margin of Swaps Users From Peers That Go Bankrupt
By Matthew Leising, Bloomberg
The Commodity Futures Trading Commission approved a proposal to allow swaps users who post collateral to a clearinghouse to have their margin protected against another investor’s bankruptcy, a move that may increase trading costs.
http://jlne.ws/eYeDR3

Bernanke Says ‘A Couple of Meetings’ Before Action
By Caroline Salas, Bloomberg
Federal Reserve Chairman Ben S. Bernanke said the central bank’s pledge to keep interest rates low for an “extended period” means there likely will be no tightening of policy “for a couple of meetings.”
http://jlne.ws/mCzHv8

U.S. Stocks, Gold Gain as Fed Keeps Plans for Low Rates
By Rita Nazareth and Inyoung Hwang, Bloomberg
The Standard & Poor’s 500 Index rallied to an almost three-year high and Treasuries fell as the Federal Reserve renewed its pledge to stimulate growth with low interest rates and said a pickup in inflation is likely temporary. Gold gained and the dollar weakened versus the euro.
http://jlne.ws/jmqj07

Stocks rise as Fed says it will end bond program
By Chip Cutter, Associated Press
Stocks turned higher Wednesday after the Federal Reserve said it would end its $600 billion bond-buying program as scheduled in June because the economy has improved.
http://jlne.ws/llcCql

Fed Trims Its Growth Outlook
By Michael S. Derby, WSJ.com
The Federal Reserve on Wednesday trimmed its outlook for growth and signaled it expects higher inflation amid a slightly lower unemployment rate for 2011.
http://jlne.ws/l0t0Tq

Supercurrency opens rift in Brazil government
By Brian Winter, Reuters
The relentless rise of Brazil's currency has opened a big rift within President Dilma Rousseff's government, as some ministers and other officials work behind the scenes for new capital controls to curb the real and protect local industry.
http://jlne.ws/kP87Rr

Fed Signals Intent to Complete Bond Buying
BY LUCA DI LEO, JON HILSENRATH AND TOM BARKLEY, WSJ.com
The Federal Reserve signaled Wednesday the coming completion of its $600 billion bond-buying program as planned, but Chairman Ben Bernanke said the central bank has no timetable for ending its low interest-rate policies.
http://jlne.ws/lVj1UF

Operator of trading platform for fixed incomes, MarketAxess, reports first quarter 2011 record revenue of $43.6 mln
Press Release
MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for U.S. and European high-grade corporate bonds, emerging markets bonds and other types of fixed-income securities, today announced results for the first quarter ended March 31, 2011.
http://jlne.ws/kTf6Yk

FRB: Press Release--FOMC statement--April 27, 2011
Information received since the Federal Open Market Committee met in March indicates that the economic recovery is proceeding at a moderate pace and overall conditions in the labor market are improving gradually.  Household spending and business investment in equipment and software continue to expand.  However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed.  Commodity prices have risen significantly since last summer, and concerns about global supplies of crude oil have contributed to a further increase in oil prices since the Committee met in March...
http://jlne.ws/jMbpqi

Canada first G-7 economy to move from recovery to self-sustaining expansion
By Mark Hopkins, Moody's Analytics
Output and employment have surpassed pre-crisis peaks, but growth remains below its potential rate...
http://jlne.ws/ej9DZF

CMG Mortgage Hires Fannie Executive
By Brian Collins, National Mortgage News
CMG Mortgage has hired Todd Hempstead to work with private investors interested in buying and securitizing conforming and Jumbo mortgages.
http://jlne.ws/fp21Yx

Bank of America's New Credit Card Penalty Interest Rate Is Nearly 30%
Daily Finance
Bank of America credit card holders, beware. If you're late on a monthly payment, that little "oops" might become a big "ouch": Your future balances could be subject to a penalty rate of nearly 30%, notes a report Wednesday in The Charlotte Observer. The penalty rate will not be applied to previous balances, however.
http://jlne.ws/gYxue3

Gensler Says CFTC May Extend Comment Period for All Swaps Rules
By Silla Brush, Bloomberg
The U.S. Commodity Futures Trading Commission voted 4-1 today to reopen or extend public comment periods for proposed derivatives regulations under the Dodd- Frank Act for an additional 30 days.
http://jlne.ws/dGWYkR

S&P sounds fresh alarm on Japan debt
By Michiyo Nakamoto in Tokyo, Financial Times
Standard & Poor's has downgraded its outlook for Japan’s sovereign debt from “stable” to “negative,” citing concerns that reconstruction costs following the March 11 disaster would increase Japan’s fiscal deficits.
http://jlne.ws/ecnMq6

EM central banks are doing Fed’s dirty work
By Richard Bernstein, Financial Times
US investors are increasingly fearful of inflation. Every cycle has some growth in headline inflation, but there is a big difference between such normal, cyclical pricing pressure and the rising fear that the US economy is somehow mutating into that of a developing markets country. Ironically, emerging market central banks’ recent monetary tightening is likely to prevent US inflation from getting out of control and could actually prolong the US economic cycle.
http://jlne.ws/f54K1t

Economy is ‘roughly in the right place’
By George Parker and Chris Giles, Financial Times
George Osborne, chancellor, has warned the cabinet that the British economy is still facing difficulties but was “roughly in the right place”, ahead of the publication on Wednesday of eagerly awaited economic data.
http://jlne.ws/fjKRwL

Barclays Posts 5% Drop in Profit on Investment Bank Decline
BusinessWeek
Barclays Plc, the U.K.'s third- largest bank by assets, said earnings fell to 1.01 billion pounds ($1.67 billion) in the first quarter, as revenue from its investment banking unit declined by 15 percent.
http://jlne.ws/fyPTwr

Credit Suisse fails to match 2010 results
By Haig Simonian in Zurich, Financial Times
Credit Suisse’s profits and revenues in the first quarter failed to match its bumper results of 2010 but were well ahead of the depressed levels of the final three months of last year, the Swiss lender announced on Wednesday.
http://jlne.ws/gGqM98

Lehman to start Aurora bank auction by June
Reuters via Yahoo! India News
Lehman Brothers Holdings Inc is expected to begin the sale process for Aurora Bank, worth around $850 million, by June as the bankrupt firm sells off pieces of itself to pay off creditors, sources familiar with the situation said.
http://jlne.ws/epluR3

Prospects bleak for US ‘muni’ funds revival
By Nicole Bullock in New York, Financial Times
The prospects are bleak for a significant revival in investor appetite this year for mutual funds that buy the debt of US states, cities and other local bodies, according to a survey of municipal bond experts.
http://jlne.ws/g3g0QU