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Another restraint likely to be cited is the depressed housing market. Home prices fell in most of the biggest cities near the end of last year. Average prices in eight major metro areas have hit their lowest points since the housing bubble burst, according to a report Tuesday by Standard & Poor's/Case-Shiller. Those falling prices are weighing on household wealth. For many people, their home is their biggest asset. Minutes of the Fed's last meeting in December also revealed that policymakers are concerned that state and local governments, confronting budget shortfalls, may be forced to cut spending more deeply and lay off more people. Bernanke has argued that the Fed can maintain its bond-buying program and hold rates at record lows because inflation isn't a threat, despite rising energy prices. Competitive pressures are restraining many companies from raising the prices they charge consumers. Inflation "hawks" such as Fisher and Plosser are especially vigilant about price increases. They tend to be more concerned about the threat of high inflation than about the need to stimulate the economy. The two other new voting members -- Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, and Charles Evans, president of the Federal Reserve Bank of Chicago
-- have backed the Fed's bond-buying program. Fed watchers think Kocherlakota, a first-time voting member, will lean toward hawkishness on inflation. Evans' reputation puts him among the "doves" -- those concerned more about strengthening the economy than about warding off inflation. The 11 members of the Fed's policymaking group -- the Federal Open Market Committee
-- also will update their economic forecasts for this year. The projections will be released in mid-February. Growth is expected to strengthen. Unemployment is likely to stay high, around 9 percent.
[Associated
Press;
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