Banks' financial woes were highlighted by another wave of write-downs. Merrill Lynch reported a $5.7 billion write-down and sold $8.5 billion in stock.
U.S. commercial banks' primary credit borrowings rose to a record $16.38 billion per day in the week ended July 23.
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On July 30, the Fed announced measures to enhance its liquidity provisions, including an extension of letting primary dealers borrow directly from the Fed through next January, a move that was widely anticipated.
The consumer price index rose 1.1 percent in June while it was up 5 percent from a year ago. Core CPI, which excludes volatile food and energy prices, was up 0.3 percent from the previous month and 2.4 percent from a year earlier. U.S. crude oil futures prices hit a record $147.27 per barrel on July 11.
The price index for personal consumption expenditures was 4.2 percent for the second quarter, and 2.1 percent when food and energy costs were excluded.
Housing starts rose a surprising 9.1 percent in June mainly due to a change in New York City building codes that if ignored would have seen starts decrease by 4 percent.
Total existing home sales fell 2.6 percent in June to a 4.86 million-unit annual rate.
New home sales fell 0.6 percent to a 530,000 annual pace in June.
Prices of U.S. single-family homes fell 0.9 percent in May from a month earlier, or down 15.8 percent from a year earlier which was a record fall.
U.S. construction spending fell a steeper-than-expected 0.4 percent in June after the prior month was revised higher, as private home building touched its lowest rate in nearly seven years.
Fed Chairman Ben Bernanke, July 15: "The possibility of higher energy prices, tighter credit conditions and a still-deeper contraction in housing markets all represent significant downside risks to the outlook for growth. At the same time, upside risks to the inflation outlook have intensified lately."