Federal Reservations

Sector fluctuates but finishes lower on the day as Fed chairman does not indicate another round of quantitative easing, and the central bank indicates real estate and banking improvements.

Originally from MarketWatch

Treasury prices turn lower as Fed chief Ben Bernanke’s testimony before Congress is interpreted as meaning another round of bond buying is less likely. Release of Beige Book does little to change prices.

Originally from MarketWatch

U.S. stocks erase gains as Fed chairman curbs enthusiasm about further monetary easing.

Originally from MarketWatch

From the NY Fed: Delinquent Debt Shrinks while Real Estate Debt Continues to Fall

Aggregate consumer debt fell $126 billion to $11.53 trillion in the fourth quarter of 2011 according to the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit, a 1.1 percent decrease from the $11.66 trillion reported in the prior quarter’s findings.
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Mortgage and home equity lines of credit (HELOC) balances fell a combined $146 billion, a sign that consumers continue to reduce housing related debt.

After a mild uptick in the third quarter, total household delinquency rates resumed their downward trend in the fourth quarter. The report finds that $1.12 trillion of consumer debt (or 9.8 percent of outstanding debt) is currently delinquent, with $824 billion seriously delinquent (at least 90 days late). Meanwhile about 2.2 percent of mortgage balances transitioned into delinquency during the fourth quarter, resuming the recent trend of reductions in this measure. However, delinquency rates remain elevated compared to historical figures.

"While we continue to see improvements in the delinquent balances and delinquency transition rates this quarter, there has been a noticeable decrease in the rate of improvement compared to 2009-2010," said Andrew Haughwout, vice president and economist at the New York Fed. "Overall it appears that delinquency rates are stabilizing at levels that remain significantly higher than pre-crisis levels."

Here is the Q4 report: Quarterly Report on Household Debt and Credit. Here are two graphs:

Click on graph for larger image.

The first graph shows aggregate consumer debt decreased slightly in Q4. From the NY Fed:

Aggregate consumer debt fell slightly in the fourth quarter. As of December 31, 2011, total consumer indebtedness was $11.53 trillion, a reduction of $126 billion (1.1%) from its September 30, 2011 level. Mortgage balances shown on consumer credit reports fell again ($134 billion or 1.6%) during the quarter; home equity lines of credit (HELOC) balances fell by $12 billion (1.9%). Household mortgage and HELOC indebtedness are now 11.0% and 11.7%, respectively, below their peaks. Consumer indebtedness excluding mortgage and HELOC balances again rose slightly ($20 billion or about 0.8%) in the quarter. Consumers’ non-real estate indebtedness now stands at $2.635 trillion. Student loan indebtedness rose slightly, to $867 billion.

The second graph shows the percent of debt in delinquency. In general, the percent of delinquent debt is declining, but what really stands out is the percent of debt 90 days delinquent (Yellow, orange and red). The percent of seriously delinquent loans will probably decline quicker now that the mortgage servicer settlement has been reached.

From the NY Fed:

As of December 31, 9.8% of outstanding debt was in some stage of delinquency, compared to 10.0% on September 30. About $1.12 trillion of consumer debt is currently delinquent, with $824 billion seriously delinquent (at least 90 days late or “severely derogatory”).
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About 2.2% of current mortgage balances transitioned into delinquency during 2011Q4, reinstating the recent trend of reductions in this measure which had been temporarily reversed in 2011Q3. The rate of transition from early (30-60 days) into serious (90 days or more) delinquency also fell slightly, to 28.8%. This reduction in delinquency transitions was accompanied by an improved cure rate: 27.2% of mortgage balances in early delinquency became “current” during the fourth quarter.

There are a number of credit graphs at the NY Fed site.

Originally from Calculated Risk

NEW YORK (MarketWatch) -- Inflation is likely to remain below the Federal Reserve's objective for several years, said New York Federal Reserve President William Dudley on Friday. In a speech two days after the Fed said its long-term inflation goal was 2%, the most explicit the Fed has been in setting an inflation target, Dudley said inflation "may be headed down further." Europe, fiscal policy and housing are inhibiting growth, while slack in the labor market is "unacceptably" high. Risks to the outlook remain skewed to the downside, mainly due to uncertainty about Europe, said Dudley in a speech in New York City. He said the Fed will continue to do its part to support the economy, "but it's not all powerful."

Originally from MarketWatch

Treasury prices bounce after a U.S. auction and the Federal reserve says it will keep rates low until late 2014.

Originally from MarketWatch

Treasury prices bounce after a U.S. auction and the Federal reserve says it will keep rates low until late 2014.

Originally from MarketWatch

WASHINGTON (MarketWatch) - U.S. wholesale prices fell 0.1% in December, as the cost of gas and food declined, the government reported Wednesday. Economists surveyed by MarketWatch had predicted a 0.1% increase. The decline in wholesale prices stemmed entirely from lower energy and food costs. They both fell 0.8% last month. Yet core wholesale prices, which strip out the volatile food and energy categories, jumped an unexpectedly high 0.3%. Economists were expecting a 0.1% increase. The core index is viewed by the Federal Reserve as a more accurate gauge of inflationary pressure. Wholesale costs jumped 4.8% in 2011 after climbing 3.8% in 2010. The core rate rose by 3.0% in 2011, the fastest 12-month increase since mid-2009.

Originally from MarketWatch

U.S. stock futures edge lower, sinking after Fitch says the European Central Bank must do more to support Italy as investors await the Federal Reserve’s Beige Book report on the U.S. economy.

Originally from MarketWatch

U.S. stock futures edge lower, sinking after Fitch says the European Central Bank must do more to support Italy as investors await the Federal Reserve’s Beige Book report on the U.S. economy.

Originally from MarketWatch