![]()
- Look Ahead: 'Risk On' Attitude Could Fuel Rally Further
- European Commission Objects to Sun Micro-Oracle Deal
- Obama Sees Strains Unless US, China Balance Growth
- Can Apple Top Microsoft as Most Valuable Tech Firm?
- Buffett to Sell Stakes in Norfolk Southern, Union Pacific
- Cramer: 5 Stocks to Play the Next Bull Run
- Do You Know Your Coca-Cola Myths?
- Electronic Arts Beats Street, Announces 1,500 Job Cuts
- Time Is Here to Look at Overseas Stocks: Bill Gross
- Why Google is Paying $750 Million for Ad Mob
- Warren Buffett to Sell Stakes In Union Pacific & Norfolk Southern
- Nov. 9: Unusual Volume Leaders
- The Battered Businesses Behind Housing
- Modern Warfare 2's Record-Breaking Launch
- Merck’s Mega-Monday Morning
- Why are Traders Bullish on This Food Company?
- Profiting From Natural Gas: Strategists
- S&P Stocks Trading at New 52-Week Highs
MOST SHARED
- Future of Marketing
- Obama Sees Strains Unless US, China Balance Growth
- Oil Tomorrow
- Priceline Crushes Profit Forecasts; Shares Jump
- European Commission Objects to Sun Micro-Oracle Deal
- Mad Mail: Buy the Berkshire Hathaway Split?
- Can Apple Top Microsoft as Most Valuable Tech Firm?
- Sprint to Cut Up to 2,500 Jobs, Sees Charge
- A Year on, China's Stimulus Postpones its Problems
Minneapolis Federal Reserve Bank President Gary Stern said on Monday he expected the U.S. housing market to weaken further because of a large pool of unsold homes.
![]() |
AP |
But employment and incomes were still rising, Stern said, and that would underpin consumption.
"The adjustment in the housing market has still some way to go. The reason I say that is because of the huge inventory of unsold homes," Stern told reporters in Singapore.
"I would expect new home building to remain quite constrained. It is also true foreclosures will go up rather than down over the next several quarters," he said on the sidelines of a risk conference in Singapore.
Earlier on Monday, he told the conference that the absence of pre-emptive action on interest rates by the Fed was not behind the subprime mortgage crisis, and he warned against rushing to push through reforms during the credit turmoil.
Delinquencies May Rise
Stern said that financial markets were braced for a rise in delinquencies and would not be surprised by such data.
While it was likely there would be a reduction in new home building in the United States for a while, the growth numbers so far showed the economy was resilient to the credit market turbulence, he said.
"At least so far, other aspects of the economy have more than outweighed the housing sector. Housing is only 5-6 percent of the economy," he said.
The U.S. economy expanded at a 3.9 percent annual pace in the July-September quarter, following growth of 3.8 percent in the second quarter.
Responding to the credit crisis, the Federal Reserve has cut its fed funds target twice by a total of 75 basis points to 4.5 percent, and market participants are increasingly speculating there will be another cut when the Fed meets on Dec. 11.
Stern declined to comment on the possibility of another rate cut but said the Fed remained flexible on policy. "We have to see how things evolve," he said.
Overall inflation in the United States was modest, despite a rise in fuel and food prices, he said.
- Do free market libertarians really believe what they say about ethics and shareholder value? The Big Money takes a look.
- Cramer did the research and found eight stocks that lead the pack. Read on to get his top picks.
- On the anniversary of the fall of the Berlin Wall, many in the former Eastern Bloc recall communism fondly.
- Software, biotech firms, even banks are watching a particular Supreme Court argument today.
- From politicians to CEOs to companies, here's your chance to vote for the winners and losers of 2009.
- A new sinister Internet viruses can turn you into an unsuspecting collector of child pornography.











