Skip navigation
Watchlist Sponsored By :


Current DateTime: 09:26:41 14 Nov 2009
LinksList Documentid: 24355697

FEATURED QUIZZES


Current DateTime: 09:26:41 14 Nov 2009
LinksList Documentid: 33793611
  • The Billionaire BFF's

      Philanthropists. Bridge partners. Hockey players. Which responses are based on facts from Buffett's and Gates' real lives?

  • The Many Myths of Coca-Cola

      Can you tell which statements are true, and which ones are just rumors?

  • Think You Understand Markets?

      We've selected some questions from the Financial Industry Regulatory Authority's test of investor knowledge. See how you do ...


Current DateTime: 09:26:41 14 Nov 2009
LinksList Documentid: 24890560
  • Winterizing Your Portfolio

      If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.

  • Investor's Guide to Real Estate

      Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.

  • Alternative Investing

      Stocks and bonds? Sure. But it's a big world out there for investors.

powered by digg
Rate Cuts Seen More Likely Following Jobs Report
By: Reuters | 04 Jan 2008 | 09:52 AM ET
Text Size

The odds of future interest rate cuts increased Friday after the release of weaker-than-expected December jobs data.

February fed funds futures rose 0.03 points to 96.115, implying a 73% chance that the Federal Reserve will lower its target for overnight rates by 50 basis points to 3.75% after its next policy setting meeting in late January (Jan. 29/30).

Federal Reserve
The Federal Reserve headquarters in Washington, DC.

The U.S. Labor Department said December nonfarm payrolls increased by 18,000, well below the median estimate of analysts surveyed by IFR Markets of a 70,000 rise. The unemployment rate increased to 5% vs. expectations of 4.8%.

Just prior to the release of the jobs data, the odds of a 50 basis point rate cut were down to 65% from 67% late Thursday.

Earlier this week, the Fed released minutes of its December meeting, which showed policymakers worried that a credit crunch could sharply brake economic growth and require big interest rate cuts.

"Some members noted the risk of an unfavorable feedback loop in which credit market conditions restrained economic growth further, leading to additional tightening of credit;
such an adverse development could require a substantial further easing of policy," the minutes said.

At the same time, members of the Fed's rate-setting Federal Open Market Committee realized that financial market conditions might improve more rapidly than they expected, which would make it appropriate to raise borrowing costs, reversing earlier cuts.

The Fed cut rates by a quarter-percentage point to 4.25 percent at the meeting.

Risks to growth had risen since their last meeting in large part due to deteriorating credit markets, the Fed said.

Even so, the policy-makers weighed the lagged impact of cumulative interest rate cuts, and a strong labor market, which suggested the economy retained some forward momentum. Overnight, interbank borrowing costs stood at 5.25 percent when the Fed began trimming borrowing costs in September.

"Members also recognized that financial market conditions might improve more rapidly than members expected, in which case a reversal of some of the rate cuts might become appropriate," the minutes said.

Copyright 2009 Reuters. Click for restrictions.
Tools:
Print EmailAdd This share icon
  • digg share

CNBC HIGHLIGHTS

  • Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
  • Brian L. Roberts
  • For the chief of cable company Comcast, growth has been about making deals – generally very large deals.
  • Some companies may start using insurance to shift carbon risk from their balance sheets to maybe... yours?
  • The president and founder of Genesis Today wants to improve America’s health, and thinks Wal-Mart can help.
  • Switzerland's privacy watchdog is taking legal action to force Google to make changes to its Street View service.
  • A wealthy, distracted Texas driver crashed his million-dollar Bugatti Veyron sports car into a salt marsh, say police.
ADD COMMENTS
Remaining characters


Current DateTime: 01:02:29 14 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:05:03 14 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 01:05:03 14 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 01:05:03 14 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters