View Full Version : Fed Plans to Keep Rates Low 'At Least Through Mid-2013'
Good news...:D
http://www.cnbc.com/id/44075950
Fed Plans to Keep Rates Low 'At Least Through Mid-2013'
Published: Tuesday, 9 Aug 2011 | 4:05 PM ET Text Size
By: CNBC.com with AP and Reuters
The Federal Reserve, acknowledging that the economy is much weaker than expected, hoped to reassure nervous markets Tuesday by saying it would keep interest rates exceptionally low "at least through mid-2013."
Joshua Roberts | Bloomberg | Getty Images
Fed Chairman Ben Bernanke
Stocks initially plunged following the Fed statement but then gyrated as investors tried to assess what such a long extension of low interest rates would mean. The market finally staged an explosive rally in the final hour as the Dow closed up Over 400 points.
Treasury bond prices also were volatile but finally ended higher. Gold soared further while the US dollar skidded.
The Fed previously had said that it would keep rates low for "an extended period." The more explicit time frame is aimed at calming investors by giving them a clearer picture of how long they will be able to obtain ultra-cheap credit. Rates have been near zero since December 2008.
Fed policymakers used significantly more downbeat language to describe current economic conditions. They said so far this year the economy has grown "considerably slower" than the Fed had expected.
They also said that temporary factors, such as high energy prices and the Japan crisis, only accounted for "some of the recent weakness" in economic activity.
Three officials, Richard Fisher of the Dallas Fed, Narayana Kocherlakota of Minneapolis and Charles Plosser of Philadelphia, voted against the move.
"The committee currently anticipates that economic conditions—including low rates of resource utilization and a subdued outlook for inflation over the medium run—are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013," the U.S. central bank said in a statement. (Click here to read the full statement)
Fed officials met against a backdrop of speculation that they would say or do something new to address a darkening economic picture.
The stock market has plunged and government data have signaled a weaker economy in the four weeks since Chairman Ben Bernanke told Congress that the Fed was ready to act if conditions worsened.
RELATED LINKS
Read the Fed's StatementUS Closer to 'Junk Bond' Than AAA: BoveCongress Needs to 'Cowboy Up' to Fix the EconomyWhat Investors Need to Hear From Bernanke
The economy grew at an annual rate of just 0.8 percent in the first six months of the year. Consumers have cut spending for the first time in 20 months.* Wages are barely rising. Manufacturing is growing only slightly. And service companies are expanding at the slowest pace in 17 months.
Employers hired more in July than during the previous two months. But the number of jobs added was far fewer than needed to significantly dent the unemployment rate, now at 9.1 percent. The rate has exceeded 9 percent in all but two months since the recession officially ended in June 2009.
Fear that another recession is unavoidable, along with worries that Europe may be unable to contain its debt crisis, has rattled stock markets.
The Dow Jones industrial average has lost nearly 15 percent of its value since July 21. On Monday, it fell 634 points—its worst day since 2008 and sixth-worst drop in history.
The tailspin on Wall Street was further fueled by Standard & Poor's decision to downgrade long-term U.S. debt.
Bernanke didn't speak publicly after Tuesday's Fed meeting.
The chairman this year made a historic change by scheduling news conferences after four of the Fed's eight policy meetings each year, but Tuesday's wasn't one of them.
Later this month at the Fed's annual retreat in Jackson Hole, Wyo., Bernanke will likely address the weakening economy, the S&P downgrade and the market turmoil.
Earlier this summer, the Fed ended a $600 billion Treasury bond-buying program. The bond purchases were intended to keep rates low to encourage spending and borrowing and lift stock prices.
—Reuters and AP contributed to this report.
Property sale is going to move up again.
Good news...:D
http://www.cnbc.com/id/44075950
Fed Plans to Keep Rates Low 'At Least Through Mid-2013'
Published: Tuesday, 9 Aug 2011 | 4:05 PM ET Text Size
By: CNBC.com with AP and Reuters
The Federal Reserve, acknowledging that the economy is much weaker than expected, hoped to reassure nervous markets Tuesday by saying it would keep interest rates exceptionally low "at least through mid-2013."
Joshua Roberts | Bloomberg | Getty Images
Fed Chairman Ben Bernanke
Stocks initially plunged following the Fed statement but then gyrated as investors tried to assess what such a long extension of low interest rates would mean. The market finally staged an explosive rally in the final hour as the Dow closed up Over 400 points.
Treasury bond prices also were volatile but finally ended higher. Gold soared further while the US dollar skidded.
The Fed previously had said that it would keep rates low for "an extended period." The more explicit time frame is aimed at calming investors by giving them a clearer picture of how long they will be able to obtain ultra-cheap credit. Rates have been near zero since December 2008.
Fed policymakers used significantly more downbeat language to describe current economic conditions. They said so far this year the economy has grown "considerably slower" than the Fed had expected.
They also said that temporary factors, such as high energy prices and the Japan crisis, only accounted for "some of the recent weakness" in economic activity.
Three officials, Richard Fisher of the Dallas Fed, Narayana Kocherlakota of Minneapolis and Charles Plosser of Philadelphia, voted against the move.
"The committee currently anticipates that economic conditions—including low rates of resource utilization and a subdued outlook for inflation over the medium run—are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013," the U.S. central bank said in a statement. (Click here to read the full statement)
Fed officials met against a backdrop of speculation that they would say or do something new to address a darkening economic picture.
The stock market has plunged and government data have signaled a weaker economy in the four weeks since Chairman Ben Bernanke told Congress that the Fed was ready to act if conditions worsened.
RELATED LINKS
Read the Fed's StatementUS Closer to 'Junk Bond' Than AAA: BoveCongress Needs to 'Cowboy Up' to Fix the EconomyWhat Investors Need to Hear From Bernanke
The economy grew at an annual rate of just 0.8 percent in the first six months of the year. Consumers have cut spending for the first time in 20 months.* Wages are barely rising. Manufacturing is growing only slightly. And service companies are expanding at the slowest pace in 17 months.
Employers hired more in July than during the previous two months. But the number of jobs added was far fewer than needed to significantly dent the unemployment rate, now at 9.1 percent. The rate has exceeded 9 percent in all but two months since the recession officially ended in June 2009.
Fear that another recession is unavoidable, along with worries that Europe may be unable to contain its debt crisis, has rattled stock markets.
The Dow Jones industrial average has lost nearly 15 percent of its value since July 21. On Monday, it fell 634 points—its worst day since 2008 and sixth-worst drop in history.
The tailspin on Wall Street was further fueled by Standard & Poor's decision to downgrade long-term U.S. debt.
Bernanke didn't speak publicly after Tuesday's Fed meeting.
The chairman this year made a historic change by scheduling news conferences after four of the Fed's eight policy meetings each year, but Tuesday's wasn't one of them.
Later this month at the Fed's annual retreat in Jackson Hole, Wyo., Bernanke will likely address the weakening economy, the S&P downgrade and the market turmoil.
Earlier this summer, the Fed ended a $600 billion Treasury bond-buying program. The bond purchases were intended to keep rates low to encourage spending and borrowing and lift stock prices.
—Reuters and AP contributed to this report.
phantom_opera
10-08-11, 09:10
Also take note also that 10y US treasury yield has hit 2.2% .... if this stays, it means 10y SGS bond yield will probably be only 1.5%
Putting cash in bank in this kind of macro-environment is suicide
Boathouse residence UOB loan SOR+0% till TOP now seems ultra attractive! :scared-3:
thomastansb
10-08-11, 09:16
So cheap money until mid 2013. Everything also 2013. Looks like 2013 is the scary year. Better clear your stock by end 2012. 1.5 years from now. Not forgetting the insane amount of resale HDB in the market by 2013. No thanks to the ten over thousands of HDB sold to 2nd timers.
So cheap money until mid 2013. Everything also 2013. Looks like 2013 is the scary year. Better clear your stock by end 2012. 1.5 years from now. Not forgetting the insane amount of resale HDB in the market by 2013. No thanks to the ten over thousands of HDB sold to 2nd timers.continue to enjoy for the next 18-21mths :cheers6: :spliff2:
Boathouse residence UOB loan SOR+0% till TOP now seems ultra attractive! :scared-3:
Still gonna worry about 4yr SSD & the flood of supply...
Buying new development at this levels only if u are super optimistic & love RISks... haha
phantom_opera
10-08-11, 10:02
Still gonna worry about 4yr SSD & the flood of supply...
Buying new development at this levels only if u are super optimistic & love RISks... haha
Doing nothing is equally risky. 2y FD rate will hit 0.5% soon. 5y SGS bond yield could hit below 1% soon.
Doing nothing is equally risky. 2y FD rate will hit 0.5% soon. 5y SGS bond yield could hit below 1% soon.
always good to have a portion held in cash. i would say 20% is a good buffer now.
Asia has not decoupled from the west.
I fully agreed with both...
Anyway, juz dun put all eggs in a single basket.
Leverage is a double-edge sword :2cents:
Boathouse residence UOB loan SOR+0% till TOP now seems ultra attractive! :scared-3:
do u know today SOR fixing is *NEGATIVE* ? ;) That means UOB has to PAY YOU for borrowing money from them :D:D How's that as a bonus for you to buy ?
(Make sure ur contract does not have a clause that states a floor :cool: but as usual Mr Wee is always smarter than you lah hahah)
do u know today SOR fixing is *NEGATIVE* ? ;) That means UOB has to PAY YOU for borrowing money from them :D:D How's that as a bonus for you to buy ?
(Make sure ur contract does not have a clause that states a floor :cool: but as usual Mr Wee is always smarter than you lah hahah)
Hi all, for sibor, I go to mas website and business times website to see.
Where can I go to see SOR?
flagship74
10-08-11, 14:51
Hi all, for sibor, I go to mas website and business times website to see.
Where can I go to see SOR?
i got bloomberg.. think it will be news in the papers tomorrow, if the journalists are sharp enough
3mth SOR = -0.012% (was 0.12124 on monday, 0.19457 on friday)
6mth SOR = -0.066% (was 0.18969 on monday, 0.23172 on friday)
yes.. SGD system flooded with liquidity...
your mortgage pegged to 3M SOR?
i got bloomberg.. think it will be news in the papers tomorrow, if the journalists are sharp enough
3mth SOR = -0.012% (was 0.12124 on monday, 0.19457 on friday)
6mth SOR = -0.066% (was 0.18969 on monday, 0.23172 on friday)
yes.. SGD system flooded with liquidity...
your mortgage pegged to 3M SOR?
no, mine is pegged to sibor... but looking to refinance....
Incredible time... Not forgetting PM Lee said we would import more foreigners. Looks like it's heading up. Putting money in the bank is not gd.
rattydrama
10-08-11, 15:15
not a good time to buy ppty, not a good time to keep too much cash and stock is volatile so how?
propertyinvestor
10-08-11, 15:17
no, mine is pegged to sibor... but looking to refinance....
I think pegged to SOR is still a better choice right now. I just convert two of my property loan to 3M SOR with lock in one year.
How to have desperate sellers at this kind of interest rates?:confused:
Where to find firesales!!!!!:beats-me-man:
How to have desperate sellers at this kind of interest rates?:confused:
Where to find firesales!!!!!:beats-me-man: ya, only those in distress and desperate to liquidate for $, then will sell. If not , such low cost of financing, why bother. Every mth collect rental, enough to pay back loan, even have positive cashflow for most landlords...:D
Maybe those who lost big time in casino, lost big time in stock market, (margin call, kena forced sell...), Ah Long San chasing becos take private loan..., possible distress scenario...
do u know today SOR fixing is *NEGATIVE* ? ;) That means UOB has to PAY YOU for borrowing money from them :D:D How's that as a bonus for you to buy ?
(Make sure ur contract does not have a clause that states a floor :cool: but as usual Mr Wee is always smarter than you lah hahah)
Haa haa, if really like that for the next 2 years can buy some more haa haa...:rolleyes:
http://www.bloomberg.com/apps/quote?ticker=SORF3M:IND
0.000%
VALUE: -0.012 SGD
Association of Banks in Singapore Swap Offer Rate Fixing 3 Month (SORF3M:IND)
"Index Notes
The USD/SGD Swap Offer Rate refers to the cost of borrowing SGD synthetically by borrowing USD for the same tenor and swapping out the USD in return for the SGD. Rates are annualised."
http://www.bloomberg.com/apps/quote?ticker=SORF3M:IND
0.000%
VALUE: -0.012 SGD
Association of Banks in Singapore Swap Offer Rate Fixing 3 Month (SORF3M:IND)
"Index Notes
The USD/SGD Swap Offer Rate refers to the cost of borrowing SGD synthetically by borrowing USD for the same tenor and swapping out the USD in return for the SGD. Rates are annualised."
such a useful link, thanks :)
V bad for inflation. My chicken chop portion today shrunk 20% :(
propertyinvestor
10-08-11, 16:27
[quote=hyenergix]V bad for inflation. My chicken chop portion today shrunk 20% :([/quote
I am getting miserable 0.4-0.5% for my FD. Stocks very unpredictable. That is why still think investing in property is a better choice.
[quote=hyenergix]V bad for inflation. My chicken chop portion today shrunk 20% :([/quote
I am getting miserable 0.4-0.5% for my FD. Stocks very unpredictable. That is why still think investing in property is a better choice.
CIMB and Maybank give better interest rates. :2cents:
around 0.8% for 12month FD.
propertyinvestor
10-08-11, 16:49
[quote=propertyinvestor]
CIMB and Maybank give better interest rates. :2cents:
around 0.8% for 12month FD.
Looks pretty good. Can consider to park some excess fund there. Thanks.
propertyinvestor
10-08-11, 17:06
http://www.bloomberg.com/apps/quote?ticker=SORF3M:IND
0.000%
VALUE: -0.012 SGD
Association of Banks in Singapore Swap Offer Rate Fixing 3 Month (SORF3M:IND)
"Index Notes
The USD/SGD Swap Offer Rate refers to the cost of borrowing SGD synthetically by borrowing USD for the same tenor and swapping out the
USD in return for the SGD. Rates are annualised."
Anyone knows what is the best housing loan offer by the bank? I just took up the bank of china 0.75% (3m SOR). One good thing is that we can swap between SOR/SIBOR later. Thanks.
Anyone knows what is the best housing loan offer by the bank? I just took up the bank of china 0.75% (3m SOR). One good thing is that we can swap between SOR/SIBOR later. Thanks. I got 1 during promo period @+0.55% only...:D
http://imcmsimages.mediacorp.sg/CMSFileserver/documents/006/PDF/20110708/0807SUF023.pdf
Geylang OKT
10-08-11, 17:16
[quote=propertyinvestor]
CIMB and Maybank give better interest rates. :2cents:
around 0.8% for 12month FD.
You do not need to park in CIMB FD for 0.8% rate. Even their savings rates is already 0.8% :D
[quote=azeoprop]
You do not need to park in CIMB FD for 0.8% rate. Even their savings rates is already 0.8% :D
Yah, I got their starsaver since when they first started, now still getting 0.9%. :spliff:
Geylang OKT
10-08-11, 17:30
Yah, I got their starsaver since when they first started, now still getting 0.9%. :spliff:
The only problem is that they got two branches. Want to deposit cheques damn lei chey. :spliff: :D
propertyinvestor
10-08-11, 20:16
I got 1 during promo period @+0.55% only...:D
http://imcmsimages.mediacorp.sg/CMSFileserver/documents/006/PDF/20110708/0807SUF023.pdf
Wa, this is good. Another one I got it from UOB at 0.85% 3M SOR with 1 year lock in. Last time, without the SSD, I used to take loan with no lock in.
hope for 46% national day discount? It is not going to happen. Watch for decade of property boom.
I got 1 during promo period @+0.55% only...:D
http://imcmsimages.mediacorp.sg/CMSFileserver/documents/006/PDF/20110708/0807SUF023.pdf
Refinance at 0.65% + 3m sor w/o lock-in thru out. Does it mean 0.5 plus only.
Refinance at 0.65% + 3m sor w/o lock-in thru out. Does it mean 0.5 plus only.
Sorry, don't quite understand, I mentioned the spread I got is 0.55%. If yours is 0.65% + 3mth SOR, your spread is 0.65%...
Not sure if I understand u correctly...
Aiya DC just meant he could be getting 0.5 total now since the rate itself is negative.
U guys got to check the contract, where it spells out the reference rate, does it have any other conditions. For Mr Wee's bank, I'm pretty sure there is a clause somewhere to floor the reference rate to 0. For other new entrants to the market, probably they have not encountered this before so not prepared. Then u can insist ur right .;)
I am not comparing the package. 3 mth sor is 0.12124 as at today. Where is the neg value?
Sorry, don't quite understand, I mentioned the spread I got is 0.55%. If yours is 0.65% + 3mth SOR, your spread is 0.65%...
Not sure if I understand u correctly...
hope for 46% national day discount? It is not going to happen. Watch for decade of property boom.
Sad tt it doesn't make much sense to hold cash these few years. Riots will erupt more frequently in e west. Many pp will slowly migrate to east for stability, jobs n businesses. 2012 looks bad. Hopefully things return to normal in 2013.
I am not comparing the package. 3 mth sor is 0.12124 as at today. Where is the neg value?
i got bloomberg.. think it will be news in the papers tomorrow, if the journalists are sharp enough
3mth SOR = -0.012% (was 0.12124 on monday, 0.19457 on friday)
6mth SOR = -0.066% (was 0.18969 on monday, 0.23172 on friday)
yes.. SGD system flooded with liquidity...
your mortgage pegged to 3M SOR?....I believe Flagship74 got from this bloomberg website:
http://www.bloomberg.com/apps/quote?ticker=SORF3M:IND
Look at SOR on bloom berg chart:
Like dive further negative....
http://www.bloomberg.com/apps/quote?ticker=SORF3M:IND
Look at SOR on bloom berg chart:
Like dive further negative....
http://www.bloomberg.com/apps/quote?ticker=SORF3M:IND
Can anyone advise why the SIBOR doesn't fall when SOR has dived??? Conversely, if going forward, the SOR spikes does it mean SIBOR can stay put??????????? :doh:
UOB capping their SOR at min 0% for their SOR-based pkgs so even if SOR is negative, u still have to pay interest based on spread + 0 SOR rate. also confirmed this afternoon that all SOR-based pkgs have been withdrawn and replaced by SIBOR-based ones.
flagship74
11-08-11, 23:09
UOB capping their SOR at min 0% for their SOR-based pkgs so even if SOR is negative, u still have to pay interest based on spread + 0 SOR rate. also confirmed this afternoon that all SOR-based pkgs have been withdrawn and replaced by SIBOR-based ones.
Do u mean all the banks are gonna to scrap SOR based?:beats-me-man:
Can anyone advise why the SIBOR doesn't fall when SOR has dived??? Conversely, if going forward, the SOR spikes does it mean SIBOR can stay put??????????? :doh:
sibor 1mth 0.2694
sibor 3mth 0.3953
sibor 12mth 0.6694
sor 1mth -0.7235
sor 3mth -0.6987
sor 12mth 0.1977
look like sibor also dropping...:D
devilplate
12-08-11, 09:10
landlord HUAT ARGH!!!!!!!!!!!!!!!!!!!!!!!!!! hahahahahaha:D :cheers6:
just continue to collect ur rentals! 2012 den evaluate again!:D :cheers6:
It doesnt make sense to keep too much cash. This is stagflation. Juz go for hard assets n keep some cash as reserve.
UOB capping their SOR at min 0% for their SOR-based pkgs so even if SOR is negative, u still have to pay interest based on spread + 0 SOR rate. also confirmed this afternoon that all SOR-based pkgs have been withdrawn and replaced by SIBOR-based ones.
is this SOR capped at % stipulated in the loan agreement?
devilplate
12-08-11, 09:27
is this SOR capped at % stipulated in the loan agreement?
floored at 0%
floored at 0%
someone told me BOC floor at 0.2% and ANZ floor a 0.1% for SOR.
is this SOR capped at % stipulated in the loan agreement?
if u have existing SOR-based pkg with UOB for, let's say, SOR+1%. If SOR dips to negative 0.2%, u don't pay interest at 0.8%. u pay at 1% coz they cap the SOR at 0%.
devilplate
12-08-11, 09:40
someone told me BOC floor at 0.2% and ANZ floor a 0.1% for SOR.
oh...nvr deal wif them b4....hhaha:ashamed1:
someone told me BOC floor at 0.2% and ANZ floor a 0.1% for SOR.I spoke to BOC, floor is zero..
propertyinvestor
12-08-11, 11:57
I spoke to BOC, floor is zero..
Ok. Not bad. I just signed with BOC few days ago.
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