Register or Sign in        Email This Page     Link To This Page    
Visit MND at MBA in NYC!
28,899
# of Forum Posts
Place your ad here

Site Tools

Join Now or Sign In
for Full Access to All Features
National Average   % Change
30 Yr FRM 3.93% -0.01%
15 Yr FRM 3.36% 0.00%
1 Yr ARM 2.68% 0.01%
5/1 Yr ARM 3.36% 0.01%
30 YR 2.69% -0.02%
Fed Prime 3.25% 0.00%

Recent Video

[View:http://video.cnbc.com/gallery/?video=3000679460&__source...
Receive Free Email Alerts
Stay up to date on breaking news and blog posts with our free News Alert Service
Notice: 'Top News' and 'Fed and Economy Watch', have been combined into a new channel called 'MND Newswire'. Check back daily for the latest housing and economic news.

The new url for MND Newswire is http://www.mortgagenewsdaily.com/news/

Fed's Plosser Says Sustained Deflation Not a "Serious Threat"

Philadelphia Fed President Charles Plosser said energy price drops aren't likely to lead to sustained deflation, noting instead that expectations are well-anchored.

Speaking in Rochester, N.Y., Plosser did say, however, that the Fed must commit to preventing sustained deflation from becoming widely anticipated.

"At a time of great concern about financial turmoil, we should keep in mind that instability in the general level of prices - whether inflation or deflation - is itself a significant source of financial instability," he said.

"When the public's inflation expectations begin to rise, that can contribute to higher actual inflation. It is therefore important for the Fed to maintain its credibility to keep inflation low and stable when large relative price movements in energy and food commodities led to large increases in the consumer price index."

He said an inflation target would be a valuable tool in preventing deflation expectations. While economic growth over the next several quarters will be weak, Plosser said he expects growth to improve in the latter part of 2009.

Plosser also said the Fed should not favour a single industry over another, and that when market normality returns, regulatory reform will be needed. The reform should address key principles, including: clear and feasible objectives; a commitment to systematic policies; transparency; and a healthy respect for the independence of the central bank, Plosser said.

By Stephen Huebl and edited by Sarah Sussman
©CEP News Ltd. 2008


 

More From MND

Mortgage Rates:
  • 30 Yr FRM 3.96%
  • |
  • 15 Yr FRM 3.30%
  • |
  • Jumbo 30 Year Fixed 4.12%
MBS Prices:
  • 30YR FNMA 4.5 106-16 (-0-03)
  • |
  • 30YR FNMA 5.0 107-22 (0-00)
  • |
  • 30YR FNMA 5.5 109-19 (-0-10)
Recent Housing Data:
  • Mortgage Apps 3.27%
  • |
  • Refinance Index 5.05%
  • |
  • Purchase Index 1.43%

Comments

Join Now or Login to Post Comments

 

More From MND

Mortgage Rates:
  • 30 Yr FRM 3.96%
  • |
  • 15 Yr FRM 3.30%
  • |
  • Jumbo 30 Year Fixed 4.12%
MBS Prices:
  • 30YR FNMA 4.5 106-16 (-0-03)
  • |
  • 30YR FNMA 5.0 107-22 (0-00)
  • |
  • 30YR FNMA 5.5 109-19 (-0-10)
Recent Housing Data:
  • Mortgage Apps 3.27%
  • |
  • Refinance Index 5.05%
  • |
  • Purchase Index 1.43%