WASHINGTON, May 20 (Xinhua) -- The U.S. Federal
Reserve policymakers are seeing "some tentative evidence" that the economy is
starting to improve from the great recession.
"Participants agreed that the information received
since the March meeting provided some tentative evidence that the pace of
contraction in real economic activity was starting to diminish," the Federal
Reserve said in the minutes released on Wednesday.
The documents said that financial market conditions
had generally strengthened, and surveys and anecdotal reports pointed to a
pickup in household and business confidence, which nonetheless remained at very
low levels.
"The latest readings from the housing market
suggested that the contraction in housing activity might have moderated over the
first quarter," the minutes from the April 28-29 Federal Open Market Committee
meeting showed.
During that meeting, the U.S. Federal Reserve held a
key interest rate unchanged at a record low of between zero and 0.25 percent to
support the struggling economy.
The U.S. central bank also vowed to "employ all
available tools to promote economic recovery and to preserve price stability."
However, the Federal Reserve revised down its
economic outlook on Wednesday, expecting the U.S. economy will shrink this year
between 1.3 and 2.0 percent, compared with the range of a 0.5 to 1.3 percent
decline in the last forecast in February.
In the first quarter of this year, the U.S. economy
shrank at an annual rate of 6.1 percent, only slightly smaller than the
6.3-percent drop in the previous quarter.
Many analysts were predicting the U.S. economy would
shrink less in the current April-June period as the government's stimulus begins
to take hold.
Earlier on Wednesday, Treasury Secretary Timothy
Geithner also said that there are important indications that the country's
financial system is starting to heal.
In prepared remarks to the Senate Banking Committee,
Geithner noted that "with the help of our lending facility with the Federal
Reserve," new securities issuance has started to revive.
"We have already seen a substantial amount of
adjustment in our financial system," he said. "Leverage has declined, the most
vulnerable parts of the non-bank financial system no longer pose the same risk,
and banks are funding themselves more conservatively."
"These are all welcome signs," said Geithner.
However, he also warned that the process of financial recovery and repair will
take time.
"Our work is not yet completed ... stability is not
enough," he said.
"We need a financial system that is not deepening or lengthening the recession, and once the conditions for recovery are in place, we need a financial system that is able to provide credit on the scale that a growing economy requires," Geithner told senators.
WASHINGTON, May 20 (Xinhua) -- U.S. Treasury Secretary Timothy Geithner said on Wednesday that there are "important indications" that the U.S. financial system is starting to heal.
In prepared remarks to the Senate Banking Committee, Geithner noted that with the help of lending facility with the Federal Reserve, new securities issuance has started to revive. Full story
WASHINGTON, May 18 (Xinhua) -- U.S. Treasury Secretary Timothy Geithner said on Monday that the American economy is stabilizing despite some difficulties ahead.
"There's more stability. The pace of decline in most measures of economic activity have slowed quite a lot, and that's an important beginning," said Geithner in a luncheon hosted by Newsweek magazine. Full story
