How the Federal Reserve Policy Can Affect Your Penny Stocks Shares
Although the U.
S.
economy is recovering and creating jobs, investors and analysts expect the Federal Reserve ( the Fed) this year to leave interest rates unchanged because of the turmoil in Europe.
42% of economists polled by The Wall Street Journal believe that the Fed will wait until 2011 or later to begin to restrict access to credit.
A month ago, only 28% thought the U.
S.
central bank would wait until next year to raise rates, this could affect stocks that are related to the banking sector.
The crisis in Europe, the risks of contagion and deflationary pressures associated with these problems will keep the Fed on the sidelines even longer than we initially thought,the Fed is taking the stance of no sudden moves that could jeopardize very fragile recovery.
Unless the crisis intensifies, it is unlikely that doubts about the ability to pay in Greece and other European countries will shake the U.
S.
economy, although they could reduce European demand for U.
S.
exports and bring the banks of the Old Continent to limit access to credit.
For the Fed, however, the crisis in Europe highlights the fragility of the global financial system and the risk, however small, that external events derail the U.
S.
recovery.
The Federal Reserve decision this weekend to reopen a program to supply dollars to the central banks of other countries highlighted their concerns.
The crisis in Greece has intensified and spread, leading to volatility in world markets.
The president of the Atlanta Fed, said on that "the crisis can be repeated" and events in Europe from the European Union problems "can be a reminder or a warning to that effect.
" The real estate market remains the big question.
Most economists projected strong growth in construction and remodeling, although the predictions range from an annual decline of 4.
3% to 25% annualized increase.
A rebound in the housing market would enhance consumption, and this could have a positive net effect on penny stocks shares that are based on housing and real estate sectors of the market.
Economists expect a moderate growth coupled with government spending to lead the economic recovery.
Consumer spending is picking up from very low levels, but the reduction in leverage, the slower access to credit, equity losses and the slow labor market recovery will lag in comparison to the rest of the economy during the rest of the year.
S.
economy is recovering and creating jobs, investors and analysts expect the Federal Reserve ( the Fed) this year to leave interest rates unchanged because of the turmoil in Europe.
42% of economists polled by The Wall Street Journal believe that the Fed will wait until 2011 or later to begin to restrict access to credit.
A month ago, only 28% thought the U.
S.
central bank would wait until next year to raise rates, this could affect stocks that are related to the banking sector.
The crisis in Europe, the risks of contagion and deflationary pressures associated with these problems will keep the Fed on the sidelines even longer than we initially thought,the Fed is taking the stance of no sudden moves that could jeopardize very fragile recovery.
Unless the crisis intensifies, it is unlikely that doubts about the ability to pay in Greece and other European countries will shake the U.
S.
economy, although they could reduce European demand for U.
S.
exports and bring the banks of the Old Continent to limit access to credit.
For the Fed, however, the crisis in Europe highlights the fragility of the global financial system and the risk, however small, that external events derail the U.
S.
recovery.
The Federal Reserve decision this weekend to reopen a program to supply dollars to the central banks of other countries highlighted their concerns.
The crisis in Greece has intensified and spread, leading to volatility in world markets.
The president of the Atlanta Fed, said on that "the crisis can be repeated" and events in Europe from the European Union problems "can be a reminder or a warning to that effect.
" The real estate market remains the big question.
Most economists projected strong growth in construction and remodeling, although the predictions range from an annual decline of 4.
3% to 25% annualized increase.
A rebound in the housing market would enhance consumption, and this could have a positive net effect on penny stocks shares that are based on housing and real estate sectors of the market.
Economists expect a moderate growth coupled with government spending to lead the economic recovery.
Consumer spending is picking up from very low levels, but the reduction in leverage, the slower access to credit, equity losses and the slow labor market recovery will lag in comparison to the rest of the economy during the rest of the year.
Source...