Sugar Editorial Picks
Sep 22, 2008 -
While most of us were logging in couch time and watching the Emmys on Sunday night, the Federal Reserve was hard at work creating a new measure that converted investment banks Morgan Stanley and Goldman Sachs into traditional bank holding companies. The two firms were the last standing independent investment banks on Wall Street, and the conversion to bank holding companies truly marks the end of an era.
As bank holding companies, the two companies will be regulated by the Fed and held to much stricter capital requirements than in their previous independent lives.
- 5 Comments
May 05, 2008 -
Aside from spending its time making important decisions about our economy, the Federal Reserve stood up to credit card companies on Friday by proposing a set of rules that would be helpful to credit card-using consumers. If approved, the new rules would affect the following changes.
- Specify when card issuers can increase interest rates on existing balances.
- Ban finance charges on balances that have been repaid.
- Prohibit late fees on customers who were not given a reasonable amount of time to pay.
- Companies wouldn't be allowed to direct payments to pay down the portion of the bill that had lower interest charges.
- Give consumers the right to opt out of overdraft protection on their deposit accounts.
Ben Bernanke, the Federal Reserve's Chairman, said their previous efforts to require companies to improve their disclosure forms wasn't enough.
- 8 Comments
May 01, 2008 -
Yesterday the Federal Reserve announced its seventh interest rate cut since September, lowering the federal funds rate by a quarter-point to 2 percent. Interest rates are now at their lowest since 2004 and reflect the Fed's ongoing concern about a weakening economy. The prime lending rate that affects consumers and businesses dropped correspondingly, which could have a positive effect on some credit cards and loans.
- 3 Comments
Mar 18, 2008 -
The Federal Reserve cut its federal funds rate this afternoon to 2.25 percent, making its sixth cut in the last six months. A weakening labor market, slowdown in consumer spending, a loss of confidence and crisis in financial markets, and a tight credit market were reasons the Fed used to support this most recent cut. Acknowledging the issues of inflationary pressures alongside a slowing economy, they stated "Uncertainty about the inflation outlook has increased.
- 5 Comments
Mar 17, 2008 -
In an attempt to avoid a financial market meltdown in the US, the Federal Reserve made an emergency rate cut on Sunday. The quarter percentage point cut applies to the discount lending rate to financial institutions, bringing the short-term lending rate from 3.5 percent to 3.25 percent. This cut only covers short-term loans that banks receive from the Federal Reserve and doesn't include loans to individual borrowers.
- 1 Comment
Feb 28, 2008 -
Yesterday, the euro's value hit its highest point against the dollar since it was introduced in 1999. The currency is valued at $1.5057 and analysts say it could move even higher than its current record. The euro's escalation is attributed to negative economic reports from the U.S.
- 11 Comments
Jan 30, 2008 -
We knew there was a possibility the Fed would decide to cut rates during its two-day meeting, and this afternoon it announced a one-half percentage point rate cut. That brings short-term rates down to three percent, insinuating that right now the Fed is more worried about an economic slowdown than rising inflation. The WSJ added that the action is "capping an unprecedented eight-day period in which officials slashed rates massively to ward off recession risks."
- 5 Comments
Jan 23, 2008 -
Yesterday's news isn't the last we'll hear from the Fed regarding interest rates. Their two day regularly scheduled meeting is just next week, and another rate reduction may be announced by the time the meeting is adjourned. Rate cuts are being used to calm the markets and instill consumer confidence to keep us investing and spending.
- 5 Comments
Jan 22, 2008 -
The Federal Reserve board cut the target rate for banks’ short-term lending from 4.25 to 3.5 percent in response to the free fall that world financial markets have been experiencing. The emergency cut is meant to stimulate the economy and the announcement was made outside the normal meeting schedule. The Fed will still hold its planned meeting next week and there's speculation that they'll announce another cut then.
- 5 Comments
Jan 17, 2008 -
Consumer prices rose in 2007 at the fastest pace since 1990. Prices rose the most for energy, food, health care, housing and education but they fell for clothing, new cars and computers. Core inflation — which the Fed closely monitors and excludes food and energy — dropped slightly and that's a sign of economic slowdown.
- 12 Comments