U.S. rate hike not imminent
The U.S. Federal Reserve is likely to keep interest rates near zero for the first quarter of next year, but to gradually raise rates thereafter, its chairwoman, Janet Yellen, said following the end of the Federal Open Market Committee’s rate meeting. Rates may not return to more normal levels until 2017, she indicated.
Earlier, in a statement following its rate announcement, the FOMC had said it could be “patient” in raising rates, but also said that this language was consistent with the committee’s previous guidance that it would keep rates near zero for a “considerable time,” which caused some confusion in markets.
The FOMC now expects rates to rise at a slower pace in 2015 and 2016 than it previously forecast, and sees rates at 2.5% at the end of 2016.
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The Independent, p. 56
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U.S. housing market seen strengthening
A strengthening recovery in the U.S. housing market is likely next year, according to a survey by Bloomberg.
The median estimates in a Bloomberg survey of 25 economists and analysts are for new home sales to rise 16% to 510,000 and for sales of existing homes to be up 5% at 5.21 million. Housing starts are seen up 15% at 1.15 million.
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Chinese housing market shows some resilience
New home prices fell in 67 of 70 Chinese cities surveyed, data for November from the country’s National Bureau of Statistics showed. Prices had fallen in 69 of the 70 cities in October.
The Chinese central bank cut interest rates in November, while the government has eased property curbs, giving a boost to the housing market, and sales are widely expected to rise next year.
