Bennie & The Feds House Finance Speech
Key excerpts from Bennie & The Feds speech before the commmittee on Financial Services, US House of Representatives.
The Nattering One muses... things are looking up, Bennie has a very bright overall outlook which investors should carefully heed.
The economic situation has become distinctly less favorable since the time of our July report.
(Since Q3) growth of real gross domestic product (GDP) has slowed sharply.
Strains in financial markets, which first became evident late last summer, have persisted;
and pressures on bank capital and the continued poor functioning of markets for
securitized credit have led to tighter credit conditions for many households and businesses.
Consumer spending... appears to have slowed significantly toward the end of the year.
The jump in the price of imported energy, which eroded real incomes and wages, likely contributed to the slowdown in spending,
as did the declines in household wealth associated with the weakness in house prices and equity prices.
Slowing job creation is yet another potential drag on household spending.
Nonresidential construction is likely to decelerate sharply in coming quarters as business activity slows and funding becomes harder to obtain.
Aside from the overhang of unsold homes... we see few signs of any serious imbalances in business inventories.
Recent indicators point to some slowing of foreign economic growth. The risks to this outlook remain to the downside.
The risks include the possibilities that the housing market or labor market may deteriorate more than is currently anticipated
and that credit conditions may tighten substantially further.
The (inflation) pass-through to core prices from higher commodity prices and from the weaker dollar may be greater than we anticipate.
The Nattering One muses... things are looking up, Bennie has a very bright overall outlook which investors should carefully heed.
The economic situation has become distinctly less favorable since the time of our July report.
(Since Q3) growth of real gross domestic product (GDP) has slowed sharply.
Strains in financial markets, which first became evident late last summer, have persisted;
and pressures on bank capital and the continued poor functioning of markets for
securitized credit have led to tighter credit conditions for many households and businesses.
Consumer spending... appears to have slowed significantly toward the end of the year.
The jump in the price of imported energy, which eroded real incomes and wages, likely contributed to the slowdown in spending,
as did the declines in household wealth associated with the weakness in house prices and equity prices.
Slowing job creation is yet another potential drag on household spending.
Nonresidential construction is likely to decelerate sharply in coming quarters as business activity slows and funding becomes harder to obtain.
Aside from the overhang of unsold homes... we see few signs of any serious imbalances in business inventories.
Recent indicators point to some slowing of foreign economic growth. The risks to this outlook remain to the downside.
The risks include the possibilities that the housing market or labor market may deteriorate more than is currently anticipated
and that credit conditions may tighten substantially further.
The (inflation) pass-through to core prices from higher commodity prices and from the weaker dollar may be greater than we anticipate.
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