FedViews

Financial markets are improving, and the crisis mode that has characterized the past year is subsiding. The adverse feedback loop, in which losses by banks and other lenders lead to tighter credit availability, which then leads to lower spending by households and businesses, has begun to slow. As such, investors’ appetite for risk is returning, […]

Over the past several weeks, forward-looking economic indicators such as stock prices, corporate bond spreads, and the Institute for Supply Management (ISM) survey of manufacturers have been giving more positive readings, while lagging economic indicators such as employment and unemployment have continued to reflect the ongoing contraction in the U.S. economy. In the manufacturing sector, […]

The economy shows many signs of continued weakness. That said, several indicators suggest that the pace of contraction is slowing. This does not mean that economic activity is increasing, but that it might bottom out in coming months. Historically, such indicators have signaled a turning point in the business cycle and the onset of a […]

The economy has been suffering from an adverse feedback loop in which losses by banks and other lenders have led to a tightening of credit availability, which in turn has crimped spending by households and businesses. The resulting reduction in demand has dragged down the housing sector and the broader economy, contributing to greater losses […]